I've lost nearly 60% in taxes-need help to minimize this

I’m fairly new to trading, started last Friday(14th Sept 2018). 'm learning to place orders correctly. I’ve traded 1700+ shares in 15 stocks during the last 4 trading days.

Today, when checking my P&L statement on Console(screenshot attached), I was surprised to find that I’ve paid nearly 60% as taxes :flushed::cold_sweat: . So, it is certain that I’m doing something wrong. If that is the case, I hope someone here will guide me on how do I reduce these taxes. Or, should I always expect this level of taxation :fearful:

I’ve gone through charges list and [brokerage-calculator] (Brokerage calculator – Zerodha), but still could not figure out the exact deductions. I did not understand how is Points to breakeven calculated and what is it’s relevance. This not present in charges list also. Charges list page mentions :

When trading at Zerodha STT/CTT can be a lot more than the brokerage we charge. Important to keep a tab.

Any help is much appreciated. :smiley:


Calculating tax as percentage of profit doesnt make any sense?

I see. But I hope you get my point that I’m doing something wrong(along with what you mentioned). Could you please advise on how to reduce STT?

you’ve lost 60% of your profits which are waay less compared to your losses, if you were profitable then it would not be a big amount. Anyways if you take delivery then your stt adds up to a lot, try intraday if you want to minimize your taxes and costs. @amarjeetalien



It depends on the kind of trades you take.

Im assuming you have spent this much on STT because of a large number of bracket orders.

Taxes and transaction charges are a percentage of the traded value, so its a fixed / predetermined cost. Include this when trying to figure if you are making a profit or not. e.g. using the brokerage calculator

Points to break even is the difference between the buy and sell value that is required to break even. It takes into consideration all of the charges on a trade except stamp duty.

1 Like

I can only advise you not to place bracket orders - particularly when trading in stocks and not derivatives - because bracket order is not necessarily executed in one go. If you traded in a stock like nestle or maruti the chances are high that your order for 100 shares could get executed 20-25 times. If that is your strategy then the only option, as I understand, is you should look for a broker who charges fixed monthly brokerage irrespective of the number of orders. Other charges are almost the lowest in Zerodha though there are a couple of other brokers who charge even less. But Zerodha has got a brand name and it has developed credibility and large client base. So it may be more reliable than other discount brokers.

Zerodha Replied that “If you place an MIS order, Bracket order (BO) or Cover order (CO) and do not close the position by 3:20 PM for Equity, 4.30 PM for CDS and 25 mins before market close for MCX, it will be squared off by our RMS team and you will be charged Rs 20 + 18% GST - apart from the brokerage for the trade, just like a call and trade.”. So if you have not squared off your position by the stipulated time, we will be charged double the amount:sob::sob::sob::sob::sob:

1 Like