New STT and CTT rates

June 4, 2013

Traders,

New CTT Charge for Commodity

We have received a lot of queries over the past few days on what the new rates of STT and CTT are and when are they applicable from.

Firstly,

STT (Securities Transaction Tax):

This was first introduced in 2004 by the FM P. Chidambaram. This was the same year when the FM waived off any long term capital gain tax, which basically meant that if you bought and held a stock for more than 1 year and if you sold it at a profit there would be no tax on this profit. The intent behind waiving off was to encourage people to invest into equities for long term. It also would have meant as a revenue loss for the government and STT was introduced to make up for this loss.

With STT, you would now have to pay tax when you traded itself. The rates until June 1, 2013 were:

For equity delivery based: 0.1% of the turnover on both buy and sell sides. For equity intraday: 0.025% of the selling side turnover.

For futures and options: 0.017% on the selling side turnover.

India is one of the few countries in the world where you have to pay a tax on trading the markets even before you make profits. Over the last few years brokers/traders kept representing this case and finally in this budget – February 2013, the rates on futures were reduced which is in effect from June 1, 2013. Please note that only the rates of futures trading has been reduced and the rates for trading equity – delivery/intraday and options trading remains the same.

STT for Futures (stock and index) from June 1, 2013 is 0.01% of the selling side turnover. STT on Options and Stocks remain the same as mentioned above.

If you trade ETFs STT earlier was 0.1% on buy and sell turnover. The new STT rates from June 1, 2013 for ETFs is Zero on buying side and 0.001% on the selling side.

The cost of trading ETFs will drop drastically especially since you trade at Zerodha. To know more about ETFs click here.

This is applicable to all contracts on NSE, BSE and MCX-SX.

* Please note that there is no STT presently for trading currency – futures and options.

* Also suggest option traders to read this article,” STT Trap” on expiry day, explains STT for exercised options.

CTT (Commodity Transaction Tax):

Has been introduced only in this budget February – 2013. This tax has been introduced most likely for making up for the revenue loss to the government which it will incur by reducing the STT for equity futures as mentioned above.

CTT is 0.01% on the selling side turnover for trading all non-agri commodities like Gold, Silver, Crude, Zinc, Copper, Aluminium, Lead, Natural Gas, Nickel, etc… All the agricultural commodities will continue to have Zero CTT.

CTT was supposed to be effective from June 1, 2013 as per what was announced in the budget. But we have yet to receive any notification from FMC – Forward Markets Commission (commodity regulator) or MCX/NCDEX (commodity exchanges) asking us to follow the new rates. Until we receive this notification you will continue to pay no CTT and our internal sources suggest that the new CTT rates might be applicable only from September 2013 onwards.

Update (26th June 2013), CTT would be applicable for al non agricultural commodities at a rate of 0.01% of the selling side turnover from JULY 1st as per the latest circular received from the exchanges.

Happy trading,

Nithin Kamath

CEO @ Zerodha and partnering startups through Rainmatter to help grow and improve the capital market ecosystem in India. Love playing poker, basketball, and guitar. “You don't have to be a hero to accomplish great things---to compete. You can just be an ordinary chap, sufficiently motivated to reach challenging goals.” - Edmund Hillary

57 comments

  1. enmy says:

    Thank you very much for the info.

    So the new rate of STT has been implemented or yet to start??
    If i trade t.day in Futures i should pay STT as 0.017% or 0.01%??

  2. deepakprem says:

    update the calculator now pls

  3. Kiran says:

    when CTT is going to charge on Commodity trade..

    • Nithin Kamath says:

      It has gotten postponed and should be announced by commodity exchanges in the month of september. We will update here as and when we get to know about it…

  4. Chandra-N-S says:

    For the sake of completeness, could you please update this article with the applicable rates for at the exercise transaction of ITM options (for both sides: sell and buy)?

    • Nithin Kamath says:

      Thanks Chandra, will do. As I mentioned here , STT for exercised options is only for people who had long/buy positions of options and not for the ones who had a short position.

  5. Maahi_007 says:

    Hi,

    If we dont square off ITM options at the expiry will this be the expression for calculation ?? Pls correct me if i’m wrong:(Strike Price+Option premium)*lot size*no of lots*0.125%/100

  6. deepak gupta says:

    hello sir
    will u plzz tell me we have to pat 0.125 as stt if Nse sell our in the money option trade..but if i buy one lot of nifty futures and do not sell it up to expiery then i have to pay stt as in case of option.

  7. Chand says:

    Sir if you buy zinc mini at 101.5 and sell them 101.55 and and same as buy 101.4 and sell 101.7 so brokage charge will be? And you are saying our brokage not more than 20 here my brokage charge 20.32 why?

    • Venu says:

      If you placed the 2 buys in separate orders, brokerage will charged @ 0.01% or Rs.20 whichever is lower. Send an email to [email protected] with your contract note and you’ll get clarity.

      • Shabeer says:

        Hi Venu

        If i have placed one order and it executed part by part , will it be treated as 1 trade or several trade based on the execution ?
        As i can see when you do a day trading there is very rare chance to have an order executed in one-shot , specially when you have more quantity such as 5,000 etc..

        If it is treated as several trades as per execution then the brokerage will be more than 40 for 1 leg !

        For instance a 200 rupees share 1,500 buy quantity executed as 2 or 4 trades then the total brokerage will be 30 just for 1 leg ! then the selling also will be same story so 30+30 =60 where it would have been 40 !

        Correct me if i am wrong as i am a very new trader with Zerodha !

        Regards
        Shabeer

        • Venu says:

          It’ll be considered as one order and a brokerage of Rs.20 will be charged. A single order can executed in multiple trades, we charge on the order number not on the trade number.

  8. sanjay says:

    i don’t no why u are taking deposit of 25k from sub-brokers of zerodha subbrokers of your company will not get most benefit, zerodha will get lot of benefit from subbrokers so you should not take any deposit at all.PSB securities from chennai base they take only 5000 deposit.you take 25000 deposit.please note you are a discount broker you should not charge that much deposit.

    regards
    sanjay puranik

    • dheerendra says:

      SIR, yesterday i have bought 20600 strike put @20 Rs. and not sell it because same day was expiry date .and banknifty put close 20560. When i have saw my contract note i surprised because i saw ctt and stt charge was very high,and weither i have 20 Rs. net profit ,actual i was in loss Rs. of 9 Rs.per lot.
      plz tell me if i do not exercise option position so what it rate per lot cost in option. plz tell me total calcultaion.
      thanks
      dheerendra

  9. JAGJEET SINGH says:

    DEAR MR NITIN KAMATH,

    HI MR NITIN,
    I HAD ENQUIRED WITH YOUR TECHNICAL TEAM BEFORE STARTING CRUDE INVESTMENTS IN JULY & AUG CONTRACT & NOBODY TOLD ME TO BE AWARE OF CTT CHARGES EVEN WHEN I TOLD THEM FRANKLY I WAS A NEW TRADER WITHOUT EXPERIENCE , I HAVE LOST HEAVILY ON LAST FRIDAY 17TH JUNE . .THE DETAILS ARE AS FOLLOWS WHICH ARE VERY SHOCKING :
    REALISED PROFIT₹60.00
    TOTAL CHARGES₹1,113.26
    OTHER CREDITS/DEBITS0
    NET REALISED PROFIT₹-1,053.26
    MAIN REGRET IS YOUR BROKERAGE CHARGED WAS 546.46 INSTEAD OF Rs 20
    SO PLEASE TRAIN YOUR TECHNICAL TEAM PROPERLY & HAVE RECORDED VOICE RANDOMLY CHECKED / MONITORED , SO THAT YOUR OTHER CUSTOMERS DONT LOSE MONEY . . & HOW COME UR TEAM CHARGED Rs 546.46 AS BROKERAGE ????
    THIS IS A BIG SHOCK TO ME

    REGARDS
    JAGJEET SINGH,
    J P NAGAR , BANGALORE

  10. Raja Rajan says:

    COM tax P&L breakdown – FY-16/17

    While observing the above in the “q ” back office it is showing statutory tax as STT where as it should be CTT for the commodities trades, please take corrective step and modify the code to CTT otherwise it may attract regulatory problems.

  11. Raman Ahuja says:

    Hello Nithin sir,

    Just out of curiosity I would like to know with regards to GST, what impact will it have on stock, f&o, commodities trading charges like STT, CTT, BSE/NSE Exchange transaction charges, Service tax on trading, stamp duty, brokerage etc.?

    Does GST have any provision to simplify these trading charges or will it remain the same?

  12. AMIT KUMAR PANDEY says:

    nitin sir, pls guide me how should i avoid paying excessive STT;. whether i should increase my turnover OR take small trades with larger profit target or anything else?

  13. Mukul says:

    Hi nithin,

    i have purchased single company shares multiple times shares Avg cost was 307.86 and how can it increase to 308.49 the other day i login to kite and all other trading charges deducted extra i checked in Contract notes cum bill. and somewhere the STT applied is also too high when i calculated, called 3 times at support but no one are able to answer.
    really a trust breaking & disappointing service, consequence; losing customers in the market

    • Mukul, I can see the ticket. STT issue I guess is clarified, I can see an email response to you. STT is 0.1% of value of stocks. Check this charge list.
      The last 19 infratel you have bought is still in T1(not come into holdings) hence they are still not added to the holdings price. If you calculate your buy average for the remaining 83 shares based on FIFO you will see that the buy average is showing correctly. Can you check the holdings on q.zerodha.com. I see that ticket has come in only yesterday afternoon, only a small team works on saturdays. Someone will get back to that ticket by tuesday (monday is holiday).

  14. Mridul says:

    Can I apply for IPO through zerodha. If yes then please let me know?

  15. Manish Nagar says:

    All example of nifty are for in the money option but what if I intraday short out of the money option on expiry day
    Please advice

  16. dheeraj says:

    Sir mene cover order m trade kiya tha and profit book karne me bad jab mine next order place kiya to MRA order execute in ho rha tha jabki jitna margin chahiye that utna MRE trading account m tha and ye pro. Kyi bar Hui jis vajah se me trade ni kr pa RHA hu…and sir m apna z pin bhul chuka Ku pls help me…..

  17. Lokesh P R says:

    Hello,
    Why the STT is very in intra-day trading.
    For a total pay in pay out obligation = 978, The STT is Rs. 155/- and exchange transaction charges is 40.37.

    Regards,
    Lokesh.R

  18. Kolluru giridhar says:

    Hi sir I am Giridhar kolluru. I am a new customer to zerodha and new to stock market.please give me information about stt. I purchased 31reliance communication shares at the price of 27.45. total amount of purchase is 850.95 and I sell at 27.94. for the profit of 15.15. and I got 0.25 loss on another share. And total profit is 14.90(fourteen rupees ninenty Paisa only). Here my profit is 14.90 but stt charge is rupees 15. Total charges were 20.02. I got profit in shares but transaction charges very high compared to profit.

  19. Manjunath says:

    Hi,
    Just have a doubt on the charge of rs 20 in currency.
    Is this rs20 charged both the time like when I buy and sell totally rs40 or once rs 20.

  20. Shailendra says:

    Sir, i have seen my ledger there i saw “call and trade charge” . What is that for? As i am not getting any call from zerodha for any trade. Zerodha has debited my balance many times on this name.

  21. Shahina Mohibi says:

    Dear Nithin Sir,

    Myself Shahina Mohibi, new to Zerodha. This Friday (06/04/2018) was my first trading day, with Zerodha. It was a good experience, but a little confusion with reference to STT calculations.

    Trade details for Equity-intraday transactions on 06/04/2018
    1.
    Qty: 2
    Buy: 562
    Sell: 562.5

    2.
    Qty: 1
    Buy: 1184.1
    Sell: 1185.1

    Turnover for STT calculation: (562.5*2 + 1185.1) = 2310.1

    STT: [0.00 ] as per https://zerodha.com/brokerage-calculator
    STT: [0.58 ] as per https://zerodha.com/charges (0.025% on the sell side / Equity Intraday)
    STT: [1.0 ] as per contract note received

    Please advise.

    Looking forward to many more trading days with Zerodha, with much bigger orders, increase in confidence and support from the Zerodha Team.

    Regards,
    Shahina Mohibi

    • Matti says:

      Your calculations are right, however, STT is rounded up to the nearest rupee when above 50p and rounded down to the nearest rupee when below 50p. Details here.

  22. MUTHUKUMAR says:

    I have bought the shares in CNC…
    Can i sell the shares during T1&T2 holding time… If I so sell any broblem is there…

    • Bhuvanesh says:

      Hey Muthu, you can unless the shares are in a trade to trade category. This post explains what are T2T stocks. There is also a chance of short delivery that you need to aware of. You can learn more about short delivery here.

  23. Kauahal patel says:

    My Id is GD3125 my trading amount is 1/1/2019 is 97.oo rupess but my STT charges 48 please explain your STT charges

  24. SAMIRAN DEBNATH says:

    Dear Zerodha,

    I hope you have earned a lot while making a client fool telling we dont charge any for delivery.. But how do you charge let me explain.. You dont give any brief about your stt charges giving example. Yesterday my trading delivery volume buy 1.5lac sold 1.5 lac. You charged me 364 stt. As per nse stt should be turnover 0.01% in both side buy and sell. As per indian calculator it may not exceed more than rs.100. But as per zerodha you charged 364rs. Well i am switching my account soon to other broker firm..

    Thanks
    ZW1256

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