Popular Way of Calculating Brokerage Charge
Brokers are middlemen who help us buying and selling shares, derivatives (futures and options ) and other financial instruments. For the services they offer brokers charge a fee called brokerage. But brokerage is not the only fee we are charged while making a transaction. The total amount paid to the stock/commodity brokers is made up of multiple charges, fees and taxes. These are made up of:
Brokerage- the fees brokers charge for the services they offer. Each broker has his own brokerage model. Brokerage calculator in India is a popular way of calculating brokerage. Traditional brokers charge the brokerage as percentage of trade amount, while the discount broker offers flat monthly or per trade fees.
Transaction charges- transaction charge is a fee charged by the broker. This is the largest portion of the brokerage paid. Transaction fee is the addition of two charges.
Transaction charge = Exchange turnover charges + clearing charges.
Securities Transaction tax- this is made up of the tax payable on the value of securities transacted through a recognized stock exchange. This charge is only on the sell side for intra day and F&O trades. It is charged on both sides for delivery trades and equity.
Stamp duty – stamp duty on security transactions is the tax levied on documentation by the state governments of India. Stamp duty varies from state to state and is charged by the state in which you live.
Service Tax – is imposed by the government of India on services provided in India. Service tax on securities transactions is charged at 12% of the total cost of brokerage plus transaction charges.
Education CESS- The education CESS is a tax imposed by the government of India to help government sponsored public education in India. It is charged at 2% of the service tax.
Higher education CESS - the higher education tax is a tax imposed by the government of India to provide and finance higher and secondary education in India. This is charged at 1% of service tax.
SEBI turnover fee or SEBI charges, SEBI securities and Exchange board of India is the regulator of the securities market in India and charges a fee for all sale and purchase transactions in securities other than debt securities. This is charged at Rs 20 per crore.
Contract note – the contract note is a document sent by the broker to the client at the end of the trading day to provide details about the transactions with the broker
Discount brokers offer the cheapest brokerage in India. Traditionally in India share brokers used to charge a certain percentage value of trade and so if you were a large investor or trader you could end up paying hefty brokerage charges. These types of brokers are known as the traditional or full service brokers. They are good for small investors who need a physical office to go to.
With the advancement of technology a new breed of brokers has emerged called the discount or the flat fee broker. They charge an aggressive flat fee for transactions that is very competitive.
Brokerage- the fees brokers charge for the services they offer. Each broker has his own brokerage model. Brokerage calculator in India is a popular way of calculating brokerage. Traditional brokers charge the brokerage as percentage of trade amount, while the discount broker offers flat monthly or per trade fees.
Transaction charges- transaction charge is a fee charged by the broker. This is the largest portion of the brokerage paid. Transaction fee is the addition of two charges.
Transaction charge = Exchange turnover charges + clearing charges.
Securities Transaction tax- this is made up of the tax payable on the value of securities transacted through a recognized stock exchange. This charge is only on the sell side for intra day and F&O trades. It is charged on both sides for delivery trades and equity.
Stamp duty – stamp duty on security transactions is the tax levied on documentation by the state governments of India. Stamp duty varies from state to state and is charged by the state in which you live.
Service Tax – is imposed by the government of India on services provided in India. Service tax on securities transactions is charged at 12% of the total cost of brokerage plus transaction charges.
Education CESS- The education CESS is a tax imposed by the government of India to help government sponsored public education in India. It is charged at 2% of the service tax.
Higher education CESS - the higher education tax is a tax imposed by the government of India to provide and finance higher and secondary education in India. This is charged at 1% of service tax.
SEBI turnover fee or SEBI charges, SEBI securities and Exchange board of India is the regulator of the securities market in India and charges a fee for all sale and purchase transactions in securities other than debt securities. This is charged at Rs 20 per crore.
Contract note – the contract note is a document sent by the broker to the client at the end of the trading day to provide details about the transactions with the broker
Discount brokers offer the cheapest brokerage in India. Traditionally in India share brokers used to charge a certain percentage value of trade and so if you were a large investor or trader you could end up paying hefty brokerage charges. These types of brokers are known as the traditional or full service brokers. They are good for small investors who need a physical office to go to.
With the advancement of technology a new breed of brokers has emerged called the discount or the flat fee broker. They charge an aggressive flat fee for transactions that is very competitive.
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