As per Last NSE Circular Dated…18Dec2020…Transaction Charges on NSE , are as per Monthly Turnover of Trading Member but Zerodha(and every other brokers) are charging Highest
Transaction Charges…So…are Zerodha and others large brokers who have huge turnovers are making Profit from Transaction Charges
But Zerodha is charging 3.45 Rs on Each Side(per 1 lac) despite its turnover will fall in highest slab for which transaction charges is 3.2 Rs(per 1 lac)
But Zerodha is charging 53 Rs on Each Side(per 1 lac premium turnover) despite its turnover will fall in highest slab for which transaction charges is 33 Rs(per 1 lac) premium turnover)
The Exchange transaction charges are charged at the slab applicable to you depending on your overall turnover. When your turnover exceeds 1250 crores, then a lower rate of transaction charges (at Rs.320/crore) gets charged automatically.
As far as the GST is concerned, it’s a grave offence if an entity collects GST and doesn’t remit it to the Government. We charge 18% GST on brokers & transaction costs, and remit the same to the Government, so there’s no extra GST collected. As a client if you’ve regsistered for GST and want to take input tax credit of the GST (lawfully), you can also provide us the GST number after which we’ll file the GST under your GST registration number.
NSE Exchange transaction is charged as per Monthly Turnover of Trading Member( Broker) …there is no guideline of exchange to charge from individual client as per its turnover…
See the attached NSE Circular…and since Zerodha falls in highest Slab…its exchange charge is least…but it charges its customer as per lowest slab
See the Circular.it is clearly mentioned. Charges are levied on Trading member and not retailer… and Zerodha ( including every other broker)…is passing on Highest Exchange charges ( Lowest Turnover Slab)…and thus having a good earning stream on discounted transaction charges offered to them on Higher Turnover…Just calculate…Zerodha Charge is 53 Rs…per 1 lac…premium Turnover…but exchange charge…33 Rs…if monthly Turnover is more then…2000 crore…but in case of zerodha…it will easily…5000 cr…per day…in options…total nse turnover is 35000 crore…so…u can calculate…its extra…500-700 crore…per year for zerodha…via…discounted transaction charge…
As per my Understanding ,Exchange Transaction Charge are on Trading Member Level…I have not see any guideline which mentions exchange charges retail customer. Its not a Government Charge like STT, Stamp Duty.which are specifically charged to clients. Also, technically, NSE is also a Private Company…they fight tooth n nail…to not come under RTI…
Thereafter , brokers are free to pass on this charges to clients. …so…they may be charging as per lowest slab .
@rachit I have answered this before on Tradingqna, and on Zconnect as well. Yes, brokers earn rebates based on trading volumes, this is a norm not just in India but across the world. In many exchanges which don’t charge transaction charges and earn from data feed, exchanges pay money for the order flow itself. By the way additional rebates based on volumes isn’t limited just to exchanges, but it is the norm with any business you deal with. If your grocery store buys a lot more shampoos, they will get a much higher margin as everyone sells at the listed price.
By the way, how much discount we get, we get to know only after a month, as these rebates are based on monthly volumes. So it is almost impossible for a broker to know on the trading day what to charge even if someone wants to charge a lower transaction charge. If a broker charged at the lowest slab and then wanted to collect more since the volumes didn’t qualify, there is no way to do so after the trading day.
By the way, the way we make money is from active equity day traders and F&O traders. They subsidize equity delivery trades. The equity delivery volumes don’t generate enough trading volumes to make enough money from any rebates we get after a month.
Thanks Sir…For prompt clarification…As I have also written in these posts.it is a gud thing …if business is profitable…nothing wrong with it…if based on trading turnover…ur giving to exchange…u get rebates…Only thing is…a perception has been made these days…dat…due to over the Top, new SEBI Rules…especially.like intraday peak margin and client level allocation requirement…even for intraday from feb2023…( which is nonsense.i think)…Brokers are suffering a lot…but fact is…option premium turnover has also increased from 5000-8000 crore(one side)…to 35000-40,0000 crore(one side) in 2 years…which is.itself a huge…profit for Brokers …
So, fact is only low capital retailer traders are suffering…due to high margin…as in zerodha…no monthly plan is available…so.small traders…has to shelve…large brokerage…as their…lot per order is small. I hope…in future…you can start some…subscription based plans…
