The exact amount of tax deducted in Zerodha is not a fixed sum but rather a calculation based on specific rates for various taxes and charges, which vary depending on whether you are engaging in equity delivery or intraday trading. These deductions include Securities Transaction Tax (STT)/Commodities Transaction Tax (CTT), Goods and Services Tax (GST), transaction charges levied by exchanges, and SEBI charges.
Zerodha Trading Charges and Taxes
When trading or investing with Zerodha, several taxes and charges are applied to your transactions. Understanding these components is crucial for calculating your total costs. The primary deductions include taxes like STT/CTT and GST, alongside other statutory charges such as transaction charges and SEBI charges.
Here's a breakdown of the applicable taxes and charges:
| Charge/Tax | Equity Delivery (Investing) | Equity Intraday (Trading) |
|---|---|---|
| STT/CTT | 0.1% on buy & sell | 0.025% on the sell side |
| Transaction Charges | NSE: 0.00297% BSE: 0.00375% |
NSE: 0.00297% BSE: 0.00375% |
| GST | 18% on (brokerage + SEBI charges + transaction charges) | 18% on (brokerage + SEBI charges + transaction charges) |
| SEBI Charges | ₹10 / crore | ₹10 / crore |
Detailed Explanation of Each Component
1. Securities Transaction Tax (STT) / Commodities Transaction Tax (CTT)
STT or CTT is a direct tax levied by the Indian government on every transaction done on a stock exchange.
- Equity Delivery: For equity delivery trades (where you buy shares and hold them, or sell shares you already own), STT is charged at 0.1% on both the buy and sell sides of the transaction value.
- Equity Intraday: For intraday equity trades (where you buy and sell shares on the same trading day), STT is charged at a lower rate of 0.025% but only on the sell side of the transaction.
2. Transaction Charges
These are charges levied by the stock exchanges (NSE - National Stock Exchange and BSE - Bombay Stock Exchange) for facilitating trades. They are a percentage of the turnover.
- For both Equity Delivery and Intraday:
- NSE: 0.00297% of the turnover.
- BSE: 0.00375% of the turnover.
3. Goods and Services Tax (GST)
GST is an indirect tax applied to the services provided by the broker and other statutory charges.
-
Calculation: GST is charged at 18% on the sum of:
- Brokerage charges (specific brokerage rates vary; Zerodha offers zero brokerage for equity delivery and a low flat fee for intraday/F&O).
- SEBI charges.
- Transaction charges.
This means that every time you pay brokerage, SEBI charges, or transaction charges, an additional 18% GST is added to that amount.
4. SEBI Charges
These are regulatory charges levied by the Securities and Exchange Board of India (SEBI) for regulating the market.
- For both Equity Delivery and Intraday: SEBI charges are fixed at ₹10 per crore of turnover. This is a very minimal charge, applicable to both buy and sell transactions.
Practical Insight
To calculate your total deductions, you would sum up the STT/CTT, the transaction charges, the SEBI charges, and then add the GST calculated on the sum of your brokerage, SEBI charges, and transaction charges. Since brokerage rates can vary based on trade type (e.g., equity delivery often has ₹0 brokerage in Zerodha, while intraday equity has a flat ₹20 or 0.03% whichever is lower), these would be factored into the GST calculation.
For instance, if you execute an equity intraday trade:
- Calculate STT/CTT on the sell value.
- Calculate transaction charges for both buy and sell.
- Calculate SEBI charges for both buy and sell.
- Add your brokerage (e.g., ₹20 for intraday).
- Sum up brokerage + SEBI charges + transaction charges, and then calculate 18% GST on this total.
- Your total deduction would be the sum of STT/CTT and the GST-inclusive amount from step 5.
