Calculation of STT Charges in Zerodha – A Comprehensive Guide
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Zerodha is one of the leading online stock brokers in India, known for its low-cost trading platform. Before trading, understanding the Securities Transaction Tax (STT) charges is crucial. STT is applicable on the sale of securities but the rates and calculations can vary based on the type of transaction. Below, we delve into how to calculate STT charges for different types of transactions on the Zerodha platform.
Understanding STT in Zerodha
STT is a tax levied on every transaction of securities. In Zerodha, the STT is applied based on the type of transaction – equity delivery, equity intraday, and derivative futures and options (FO). The rates can change from time to time, so it's important to stay updated with the latest rates.
1. Equity Delivery Transactions
The STT rate for equity delivery transactions is 0.1% on the sell side.
Calculation Example
If you sell shares worth INR 10,000, the calculation for STT would be:
STT Sale Value × STT Rate
STT 10,000 × 0.1% INR 10
2. Equity Intraday Transactions
For intraday transactions, the STT rate is 0.025% on both the buy and sell sides.
Calculation Example
If you buy and sell shares worth INR 10,000 each, the STT calculations would be:
Buy STT 10,000 × 0.025% INR 2.50
Sell STT 10,000 × 0.025% INR 2.50
Total STT Buy STT Sell STT INR 2.50 INR 2.50 INR 5
3. Derivatives FO Transactions
The STT rate for futures and options (FO) transactions is 0.01% on the sell side.
Calculation Example
If you sell a futures contract worth INR 100,000, the calculation for STT would be:
STT Sale Value × STT Rate
STT 100,000 × 0.01% INR 10
Summary of Steps
Identify the type of transaction: delivery, intraday, or the appropriate STT rate for that transaction the sale value by the STT rate to find the charge.Important Notes
STT is applicable only on the selling price of the check for any updates or changes in the STT rates from the government or Zerodha.By following these steps, you can easily calculate STT charges for your trades on Zerodha. Additionally, you can also use the online STT calculator provided directly on the Zerodha platform for quick and accurate calculations.
Using the Zerodha Calculator
To use the Zerodha STT calculator, simply navigate to the Zerodha site and look for the "Brokerage Calculator". You can find this by entering "zerodha brokerage calculator" in any search engine. Enter the necessary inputs such as the purchase amount, number of shares purchased, and the sold-out amount, and the calculator will automatically provide all the necessary taxes and charges, including STT.
Conclusion
Calculating STT charges is an essential part of trading on Zerodha. Understanding the rates and how to apply them can help you manage your trading costs effectively. Remember, the rates and rules may change, so it's always good to stay updated. Happy trading!