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Common Charges Involved In Stock Investing

Stock Investing

Everything we do has some kind of extra charge, doesn’t it? The same applies everywhere – most times, it is only good.

Like, ensuring your travel – though there are extra charges to get that done, we all know this is a safe trip. Also, as an added note to that, we also need to know that we would pay for the services that have been given to us and so much more for stock investing.

This applies to your stock investments as well. So if you are not pretty sure about it – this article will go you through them all. 

So, let us move forward to the charges that incur on stock investing

Are There Any Costs While Investing in Stocks? 

Are There Any Costs While Investing in Stocks? 

There are actually various kinds of costs or stock investing charges you would have to bear while you buy or sell shares. 

When you make a profit in the stock markets, they would be taxed. Some of the other common charges when investing in stocks are brokerages, stamp duty, and much more. 

8 Types Of Charges In Stock Investing 

8 Types Of Charges In Stock Investing 

Whether you are looking at BSE Sensex 100 Share Price, or any other index for that matter, while you step closer to start investing in them, there will be charges you have to take up. 

It is always a good thing to know them all before you get started on your stock investing. 

1. Loads And Commission 

The front-end load is a fee that is charged when you buy shares; a back-end load is a fee that incurs when selling. 

Commissions are the fee that is paid to the broker for their stock investing services. 

2. Marketing Costs 

In various cases, the marketing fees assist in paying for marketing and distribution costs. 

It means that you are paying the manager to promote a stock investing fund to other potential investors. 

3. Annual And Custodian Fees 

The Annual fee comes up to a certain amount every year and could add up too. 

The custodian fees would usually apply to retirement accounts and cover costs that are associated with fulfilling regulations. 

4. Stamp Duty 

The stock investing stamp duty is on the value of transferred shares, and this rate differentiates across states as the states are in charge of setting up and collecting the stamp duty. 

It is charged on both – the buying and the selling sides that are charged on the turnover amount. 

5. Service Tax 

The stock investing service charges are levied at 15% of the brokerage charge paid by the investors, and it is the same for the delivery and intraday trading. 

6. SEBI Charges 

The apex market regulator of the securities markets in India has both side fees of a trading transaction with a turnover charge of 0.0002% of the total. 

The stock investing charges are quite the same for intraday trading and delivery trading. 

7. Depository Participant Charges

The two stock depositories in India that are – the Central Depository Services Limited and the National Securities Depository Limited Charge a fixed sum to keep your transactions in an electronic form. 

The depository participants – that is, the Demat account provider or brokerage company are charged. For this, your Demat account will charge you (the investor). 

8. Securities Transaction Tax 

This is a charge that will cost both sides – buying and selling. In the case of intraday trading, the STT is charged when the stock is sold. Securities Transaction Tax is 0.1% of the whole transaction, on each side of the trading, for delivery. 

For intraday stock investing and trading, the charges are around 0.025% of the complete transaction on the selling party. 

Apart from these charges, there is another thing that you need to take into consideration – that is the impact of your capital gains. When investing in shares, there are two types of gains that you will be getting. They are explained to you below. 

  • Short-Term Capital Gain Tax 

The stock investing short-term capital gains tax is levied if your holding period does not cross a year. It is levied at the flat rate of 15%. The cess and surcharge are also levied here. Also, this is irrespective of the tax slab that you will fall under.

  • Long-Term Capital Gains 

As the name says, when you sell your stock after the holding period of a year, the capital gains realized are termed ‘long-term.’ The gains here are of up to Rs. 1 lakh for a year, then they are made to be tax-exempt. Any long-term stock investing and capital that is over a lakh, then it is taxed at 10%, and indexation is not allowed. 


Now, you know the most common charges that you will be paying once you start investing; you are pretty much ready to start your journey in stock investing. But before all of that, do your research on the stocks that you choose to invest in. 

Make sure you know the company, you know how the business works, your extra charges, the history, and so much more. 

You must know that saving up on trading would make no difference to you if you lose out on your investment because of a lack of research.

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Sumona is the publisher for RSLOnline. Besides her professional commitments, she is also used to spending time sharing sentient blogs regarding topics like Technology, Business, fashion, fitness, and more. Follow more of her contributions in SmartBusinessDaily and FollowtheFashion

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