Glossary
What is Stamp Duty? Meaning, Example & Why It Matters
A statutory charge levied on the buy side of securities transactions, collected through your broker.
Stamp duty is a charge on the transfer of securities, collected under the Indian Stamp Act. Since a central reform, stamp duty on exchange trades is collected uniformly across states through the exchanges and depositories, and it is charged on the buyer, not the seller. The rate is a small percentage of the trade value and varies by segment, such as delivery, intraday and derivatives.
Why Stamp Duty matters to you
Like STT, stamp duty is the same no matter which broker you choose, so it does not affect broker comparisons directly. However, it is part of your total cost of trading and can matter for frequent buyers. Because it is only charged when you buy, your cost on the entry side of a trade is slightly higher than on the exit side.
Stamp duty rates have been changed by law before and could change again. Avoid relying on numbers in old blog posts or videos. Your contract note always shows the exact stamp duty charged on each trade, which is the most reliable source.
Practical tip: when comparing the break-even point of a trade, include stamp duty along with STT, exchange charges, SEBI fees, GST and brokerage. Rates change; check the latest exchange circular before using any specific figure.
See it in rupees: every charge and tax on a real trade, at every broker. Open the brokerage calculator
Related terms
- GlossarySTT (Securities Transaction Tax)
A tax collected by the government on the value of securities you buy or sell on a recognised stock exchange.
- GlossaryExchange Transaction Charges
Fees charged by stock exchanges like NSE and BSE on the value of trades executed on their platform.
- GlossarySEBI Turnover Fee
A very small regulatory fee charged on trade turnover to fund the market regulator, SEBI.
- GlossaryContract Note
A legal document your broker sends after each trading day listing every trade, its price and all charges.
Frequently asked questions
Is stamp duty charged when I sell shares?
For exchange trades, stamp duty is currently levied on the buyer. Sellers do not pay it on the same transaction.
Does stamp duty depend on my state?
For exchange-traded securities, stamp duty is now collected at uniform rates across India through the exchanges and depositories.
Where can I see how much stamp duty I paid?
Your contract note shows the stamp duty charged on each trading day.