Intraday Trading Tax Rate in India

Taxes on Intraday Share Trading in Cash, future & Option Segment

Before we get into a business we must know that which are the taxes which one needs to pay to able to make a profit in the market and here we are going to discuss with an example and we will also discuss the costs which can be curtailed in intraday trading. You can check New Margin Policy here which will have its full effect in Sep 2021, so you have still 10 months to take benefit of the higher-margin facility available.

As a trader one is generally not aware that what all goes into the taxation part and one should analyse the contract note and if they find brokerage is too high and they must speak to them to lower their brokerage rate as this is the only rate which can be lowered as balance all are fixed percentage taxes on which you do not have any control as it is fixed by the Govt of India and generally such announcements are made in the budget.

Let's assume, you bought and sold 1 lot of Bank Nifty futures in Intraday. You buy at 32000 Bank Nifty futures and sell at 32010. let us say ten points of profits. Considering, you are trading with 1 lot, which is 20 quantity, then your gross profit is 20*10=200 Rs.

But at 200 Rs. profit, there is multiple cost you end up paying, Rs.40 is gone for brokerage assuming Rs.20 per order, so buy-side Rs.20 and sell-side Rs.20. Then you pay 0.0019% of turnover as exchange transaction charges.

Turnover Calculation, simply multiple quantities with entry price + multiple quantities with exit price and is as following:

(20*32000)+(20*32010).

You pay 18% GST on brokerage, which is 18% on Rs.40.

You pay Securities Transaction Tax, which is 0.01% on sell-side turnover, which is 0.01% (20*32010).

You pay SEBI Fee, which is 0.0002% on total turnover, which is 0.0002% * (20*32000)+(20*32010).

You pay Stamp duty, which is 0.003% on total turnover, which is 0.003% * (20*32000)+(20*32010).

Adding up all charges, it's around Rs.176.5, so in Rs.200 profit you ended up paying Rs.176 as total transaction cost, so simply we should not calculate only Rs.40 brokerage we pay is our charges.

Thus this is the first step that will help you know which is your breakeven point above which you will start making a profit.

Hope it answers the queries of the number of clients who are not aware that how brokerage and other taxes are charged.

You can get benefitted from our Best Bank Nifty Option tips and you are good to get going with profit to your home on a daily basis and we generally close within the first two hours of the day. Moreover, our profit is so large that you do not need to worry about the taxes but remember we said no need to worry but you need to keep it in the back of mind to calculate the break-even point.