What Indian trading charges do to your P&L
Most traders track gross profit and wonder why the account balance disagrees. The gap has a name, and it is made of six separate line items.
Start freeThe six charges on an Indian trade
- Brokerage — what your broker charges per executed order, flat or percentage.
- Securities Transaction Tax (STT) — a statutory tax applied differently to delivery, intraday and derivatives, and on different legs depending on the product.
- Exchange transaction charges — levied by the exchange on turnover, and different for equity, futures and options.
- Stamp duty — charged on the buy side, at rates set for each instrument type.
- SEBI turnover fees — a small regulator levy on turnover.
- GST — applied on brokerage plus certain of the charges above, not on your profit.
Rates change from time to time and differ by segment. Your contract note is always the authoritative record.
Why the pain is not spread evenly
Charges scale with turnover, not with profit. That means the trader who takes twenty small scalps a day pays a far bigger share of gross profit than the swing trader holding four positions a month for the same rupee gain. Two strategies can produce identical gross P&L and completely different account balances.
Options traders feel a second effect: charges are calculated on premium or notional depending on the line item, so the ratio of costs to reward shifts dramatically between cheap out-of-the-money contracts and in-the-money ones.
The number that actually matters
Net expectancy — average net profit per trade after all charges — is the only figure that tells you whether a strategy is worth running. A system with a 60% win rate and a net expectancy near zero is a hobby, not an edge.
Rule of thumb: before scaling up frequency, check what fraction of your gross profit charges consume. If it is over a third, size and frequency need rethinking before entries do.
How TradeCraft handles this
Every trade recorded in TradeCraft — synced, uploaded or manual, live or simulated — runs through the same Indian charges engine before any performance metric is produced. Your win rate, profit factor, expectancy and equity curve are all net figures, so a strategy that only works before costs is exposed immediately rather than three months later.