Taxes to pay for day trading
1. The Service tax is 12.36% (12% + 0.24% education cess + 0.12 % secondary and higher education cess) only on
brokerage (Update Sept 2015).
2. The STT (Security Transaction Tax) is 0.025% only on selling amount.
3. The Stamp duty on total turnover for a day which is 0.002%.
4. Finally you have to pay Regulatory charges on total turnover for a day which is 0.004%
No need to worry much about these taxes as all these taxes will add up to very small amount at the end of the day compared
our profits as explained in following sub sections.
Now let’s see how a take a small profit and how it adds to big profit at the end of the month.
The following example is calculated taking into consideration intraday brokerage rate as 0.03% for buying and 0.03% for selling.
Suppose a trader bought Bharati Airtel at Rs.380 and quantity 100 so the total amount trader has to pay is Rs.380 x 100 =
The buying amount is Rs.38,000 (Rs.380 x 100 Qty shares)
0.03% as brokerage on 38,000 comes to Rs.11.40
Service Tax on Brokerage amount (service tax is applicable only to brokerage amount)
The service tax is 12.36%, so 12.36 % for Rs.11.40 comes to Rs 1.40.
Total charges the trader has to pay on buying amount is
The total brokerage + service tax which come to Rs.11.40 + Rs.1.40 = Rs.12.80
Now let’s calculate the Brokerage and Taxes on selling amount
Suppose the trader sold Bharati Airtel at Rs.381.5 (profit of small amount of Rs 1.5), Qty - 100 so the amount comes to
Rs.38,150 (Rs.381.5 x 100 Qty shares).
So the trader got the profit of Rs 150.
Brokerage charges on selling amount
0.03% brokerage on amount 38,150, comes to Rs.11.44
Service Tax on selling brokerage
The service tax is 12.36% only on brokerage amount, so 12.36 % on Rs.11.44 comes to Rs 1.41.
STT (Service Transaction Tax) is only on selling amount. The STT is 0.025%.
The selling amount is 38,150 so the STT comes to Rs.9.53.
Total charges the trader has to pay on selling amount is = Brokerage + service tax + STT
= Rs.11.44 + Rs.1.41 + Rs.9.53
Total amount you have to pay to broker for one transaction is ( on buying and selling including Brokerage and taxes)
= Rs.12.8 (buying) + Rs.22.38 (selling)