Brokerage & Tax on Trading Income in India (2026 Guide)

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You place a trade. The app shows ₹0 brokerage on delivery, or a flat ₹20 on F&O, and for a second it feels almost too easy. Then the money that lands in your bank account is less than what the P&L tab said you made. Not by a rounding error. Sometimes by a lot. You open the contract note, scroll past ten line items you've never really read, and think: okay, where did this go.

That gap between what you see on the screen and what actually reaches your account is the whole story of trading costs in India. Brokerage is the smallest part of it. The rest is a stack of government charges and taxes that apply whether your broker charges you zero or not, and in 2026, some of those charges just went up.

What "zero brokerage" actually means

Zerodha charges ₹0 brokerage on equity delivery trades, meaning buying shares and holding them, no matter for how long. Other discount brokers price it differently: Upstox lists ₹20 per executed order for delivery, and Groww lists the lower of ₹20 or 0.1% of the order value, with a minimum of ₹5. Check your own broker's pricing page. On intraday, futures, and options, Zerodha's model is ₹20 per executed order or 0.03% of the trade value, whichever is lower, for intraday and futures, and a flat ₹20 per executed order on options, regardless of the premium.

Here's the part that trips people up: "per executed order" is not "per lot" and not "per rupee traded." If you buy ten lots of Nifty futures in a single order, that's still one ₹20 charge, not ten. But if you split that into two separate orders, you've paid ₹40. Order structure matters more than most beginners realize.

And brokerage was never the real cost. It's the smallest line on your contract note. The rest, STT, transaction charges, GST, stamp duty, and for delivery trades, a depository charge, is where the money actually goes, and none of it is optional or broker-dependent.

The charges nobody explains upfront

Every trade in India carries five kinds of charges stacked on top of brokerage, and they apply the same way no matter which broker you use, because four of the five are government-mandated.

Securities Transaction Tax (STT) is the biggest one, and it changed in 2026. Under Budget 2026-27, the STT on futures and options went up from 1 April 2026. Futures now attract 0.05% STT on the sell side, up from 0.02%, a 150% hike. Options now attract 0.15% of the premium on the sell side, up from 0.10%, and exercised options also move to 0.15%, up from 0.125%. Equity delivery and intraday STT rates were left unchanged: delivery is charged on both the buy and sell side at 0.1% each, intraday only on the sell side at 0.025%.

Put in rupees: sell ₹1 lakh worth of shares via delivery, and STT alone is ₹100 on that leg. That's ₹200 for the full buy-sell round trip. Sell an options contract with ₹50,000 in premium, and STT is ₹75 on that leg alone, before brokerage or anything else touches it.

Transaction charges (exchange charges) are small, a fraction of a percent, but they're charged by NSE or BSE on every single trade, separate from your broker.

GST at 18% is charged on the sum of your brokerage, the exchange transaction charges and the SEBI turnover fee. Not on the whole trade value, just on those components. Still, on a high-frequency trading day, it adds up faster than people expect.

Stamp duty applies only on the buy side, at rates set by the Indian Stamp Act (as amended by the Finance Act, 2019, with a uniform structure since July 2020), for delivery trades, typically around 0.015% of the buy value.

SEBI turnover fees are tiny, around ₹10 per crore of turnover, but they exist, and they show up on every contract note.

DP charges are the one that catches new delivery investors off guard, because it doesn't show up on the contract note at all. It's charged separately by the depository. Every time you sell shares you're holding in delivery, CDSL or NSDL charges a flat fee per scrip per day, regardless of how many shares you sell in that scrip that day. At Zerodha, this currently works out to around ₹15.34 per scrip (split between the depository and the broker, plus GST). Sell five different stocks in one day and that's five separate DP charges, even if you sell just one share of each.

None of this is a "hidden fee" in the sinister sense. It's all disclosed on your contract note and the broker's charges page. It's just that almost nobody reads the full breakdown until curiosity, or a smaller-than-expected bank credit, makes them look.

A worked example: what a ₹1 lakh delivery trade actually costs

Say you buy ₹1,00,000 worth of shares via delivery and sell them later at the same price. No profit, no loss on the stock itself. What does the round trip cost you, just in charges?

• Brokerage: ₹0 (delivery is free on most discount brokers)
• STT: ₹100 on buy + ₹100 on sell = ₹200
• Stamp duty: roughly ₹15 on the buy side
• Transaction charges: a small fraction of a percent on both legs, typically a few rupees
• DP charge on the sell: roughly ₹15.34 (one scrip, one day)
• GST: 18% on brokerage plus transaction charges and SEBI fees (small, since brokerage is ₹0)

Even with "zero brokerage," you're down somewhere around ₹230 to ₹250 before the stock has moved a single rupee in your favor. That's the number that matters when you're deciding whether a small price move is actually a profit or just barely covering costs.

How trading income is actually taxed

This is where most beginners get genuinely confused, because trading income in India isn't taxed as one thing. It's split into three categories, and each one is taxed differently.

Delivery-based trading (holding shares, no leverage) is taxed as capital gains. Sell within 12 months and it's Short-Term Capital Gains (STCG), taxed at a flat 20% under s.196 of the Income-tax Act, 2025 (earlier s.111A). Hold longer than 12 months and it's Long-Term Capital Gains (LTCG), taxed at 12.5% on the gains above ₹1.25 lakh in a year under s.198 (earlier s.112A). Both rates apply to listed equity where STT has been paid.

Intraday trading (buying and selling the same stock on the same day) is classified as speculative business income, not capital gains. It gets added to your other income and taxed at your regular income tax slab rate. Losses from intraday trading can be carried forward for 4 years (s.113), but this matters: they can only be set off against other speculative income, not against your salary or capital gains.

F&O trading (futures and options) is classified as non-speculative business income, also taxed at your slab rate, but with more flexibility. F&O losses can be set off against most other income (except salary) in the same year, and carried forward for 8 years if not fully used.

One number that confuses almost everyone doing their own taxes: turnover, for F&O tax purposes, is not the total value of contracts you traded. It's the absolute sum of your profits and losses across all trades. So if you made ₹50,000 profit on one trade and lost ₹30,000 on another, the profit-and-loss part of your turnover for that pair is ₹80,000, not ₹20,000 net. ICAI's guidance adds a few further items for options, such as premium received on options you sold, so confirm the full method with your CA. This number decides whether you need a tax audit under Section 44AB (or Section 63(1)), so getting it wrong isn't a small mistake. You can calculate your trading turnover and tax liability across equity, intraday, and derivatives using the Artha Trading Tax Intelligence Engine. The method is described in our Trading Tax Methodology and the statutory sources are listed in Statutory Sources.

Where people actually get this wrong

The most common error isn't in the tax filing. It's earlier, in how people track their trades all year. Someone does intraday occasionally and F&O occasionally and treats it all as "trading income" in their head, then tries to net it all together at tax time. It doesn't work that way; the two are taxed under different heads, and losses in one can't always offset gains in the other. By the time they're filing in July, reconstructing which trade was intraday and which was a multi-day F&O position from six months ago is a mess that a simple running log would have avoided.

The second common mistake is ignoring turnover until it's too late. Active F&O traders sometimes cross the tax-audit threshold without realizing it, because they were only looking at their net P&L, not the sum of all profits and losses. Finding that out after the financial year has ended, when the audit has to be completed before the return, is a stressful way to learn what turnover means.

And the third: people assume "zero brokerage" means trading is basically free, so they don't factor STT, DP charges, and stamp duty into whether a trade is actually worth taking. On a small, frequent-trade strategy, these charges alone can be the difference between a real edge and a strategy that only looks profitable before costs.

The actual decision: know your number before you trade, not after

None of this changes whether trading is right for you. What it changes is whether you know your real breakeven point before you place a trade, or find it out afterward when the bank credit doesn't match what the app showed. A ₹1 lakh delivery round trip costing you ₹230 to ₹250 in charges alone means the stock has to move in your favor by more than that just to get you back to zero, and that's before you've made a single rupee of actual profit.

The honest version of "know your numbers" isn't a slogan. It's opening your broker's charges page once, running one real trade through their calculator, and knowing, genuinely knowing, what a breakeven move looks like for the way you actually trade. (For small business owners and freelancers exploring simplified tax filing schemes, you can also use our Presumptive Tax Simulator to compute Section 44AD and 44ADA deemed profits).

What's the number you didn't expect the first time you actually read your own contract note?

Regulatory & Educational Disclaimer: The content on HeyArtha is published strictly for educational, career awareness, and personal reflection purposes. Nothing contained in this article constitutes financial, investment, legal, or taxation advice. We are not a SEBI-registered investment advisor or research analyst. Trading and investments in financial markets involve risk of capital loss. Always consult a certified professional before making financial commitments.