Brokerage and taxes are higher in intraday equity trading or in intraday futures trading?

General
2

Futures is cheaper to trade. 

Brokerage

Most brokers charge the same for intraday equity and futures. 

Security transaction tax (STT)

Check this charge list

STT for intraday equity is 0.025% on selling side (Rs 2500 per crore)

​STT for futures is 0.01% on selling side (Rs 1000 per crore). 


Exchange and clearing charges

Check this charge list

For equity NSE charges 0.00325% (Rs 325/crore)

For futures NSE + clearing charges 0.0021% (Rs 210/crore)

3 Likes
3

Brokerage is not a big hurdle now a days. As there are so many discount brokers with nice trading platforms though they still need to grow up. But the exchange charges and Govt. charges are really huge. You have to pay STT, Transaction Charges, Service Tax, SEBI Charges, State Stamp Duty etc.

More charges are on equity trading than futures trading. If you do options trading then charges are even low. but there are hardly 5-10 stock futures which are actively traded. so you cant buy other futures or stock options as there is no liquidity. As a day trader if you want to be profitable these charges are really big hurdle for active traders. Because of these charges BEP become higher and by all these hurdles if you make profit then Govt. also ask for Capital Gains Tax and Income Tax.

In India lot of peoples talk about the market and sensex but there are below 1% population is actively traded. If you do it properly trading is not gambling hence Govt. and exchanges should waive or lowered these charges and promote stock market and trading, investing to 99% population.

This will be done only if brokerage companies pressure Govt. and exchanges. But I don’t think like AMFI they have any association.

3 Likes
4

thanks Nithin, really appreciate your active participation :slight_smile:

5

Honestly, you explained all the issues very well. I was doing intraday trading with small amount just for the sake of learning and making 7-10% every month. If I consider charges of broker then it was still about 5% after deduction, but as soon as govt charges come-in, the overall profit becomes less than 1% a month. Govt took almost 5% out of the profit.
I am not even considering income tax in all this. Basically, govt charges are eating up intraday traders. Now I understand why 90% traders in India are into options only :zipper_mouth_face: