GST on Share Market Transactions: Services and Charges
If you trade in stocks, you’ve probably noticed a small GST charge on every buy and sell order. While the profit or loss on shares isn’t taxed under GST, the services you use during trading are. This blog breaks down the gst on share market transactions, which charges are affected, and how it impacts retail investors and traders.
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GST on Share Trading: Which Charges Attract GST?
| Charge Type | GST Rate | Remarks |
|---|---|---|
| Brokerage fee (buy/sell order) | 18% | Applied on brokerage amount, not full trade value |
| DP charges (NSDL/CDSL) | 18% | For Demat debit/credit services |
| Annual maintenance charges | 18% | Yearly charge for holding a Demat account |
| SEBI/Exchange fees | No GST | These are statutory fees, exempt from GST |
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How GST Is Calculated in a Trade
Let’s say you buy shares worth ₹1,00,000 and your broker charges ₹20 as brokerage:
- GST = 18% of ₹20 = ₹3.60
- Total charges = ₹20 (brokerage) + ₹3.60 (GST) = ₹23.60
- Other charges like STT, stamp duty, etc., are applied separately
GST is only applied to the service component, not the actual trade value.
GST on Stock Market Services: Impact on Investors
- Retail investors pay small amounts per trade as GST
- High-frequency traders may see a significant cumulative impact
- No ITC available unless trading is a registered business activity
GST on Stock Market in India: Who Pays What?
| Service | Paid By | GST Applicability |
|---|---|---|
| Brokerage charges | Trader/Investor | 18% on brokerage |
| Demat account AMC | Account Holder | 18% |
| DP transaction charges | Account Holder | 18% |
| Government levies (STT, stamp duty) | Exempt | No GST |
Understanding the gst on share market transactions helps you plan your trading expenses better and ensures transparency in all stock-related services.
I am a chartered accountant with over 14 years of experience. I understand income tax, GST, and balancing financial records. I analyze financial statements and tax codes effectively. However, I also have a passion for writing, which is different from working with numbers. Recently, I started writing articles and blog posts. My goal is to make finance easier for everyday people to understand.
Frequently Asked Questions (FAQs)
- Is GST applicable to share trading in India?Not on the trade itself, but yes on services like brokerage, Demat charges, and AMC.
- What is the GST on share trading brokerage?18% GST is applied on the brokerage amount, not on the full trade value.
- Can I claim Input Tax Credit on trading-related GST?Only if trading is part of your registered business activity under GST.
- Are government charges like STT and stamp duty taxed under GST?No. STT, stamp duty, and SEBI fees are outside GST scope.
- Does GST apply to mutual fund or SIP services too?Yes, 18% GST applies to distributor commissions and service charges, not on the fund value.
