Investment taxes in India: STCG, LTCG, STT, GST, stamp duty

Retail investors in India keep returning to the same question after every trade confirmation. How much of the cost is market movement, and how much is statutory taxes and platform charges. Recent Reddit threads have been focused on separating taxes on gains from charges on transactions. The discussions also highlight that several costs apply even when the trade loses money. That difference matters most for short-term and high-turnover strategies. Another recurring confusion is around GST and whether it sits on top of every line item. The consensus in these posts is clear on one point. GST applies to specific services and fees, not to STT or stamp duty. A clean breakdown helps investors estimate costs before placing orders.

Why taxes and charges trend among Indian investors

People often mix up taxes on capital gains with charges on execution. On Indian exchanges, you can pay a tax even if the trade is a loss, because some levies are linked to turnover. Social discussions also point out that the contract note contains multiple line items with similar names. For example, STT and stamp duty are both statutory levies, but they behave differently. One is charged on both sides in some segments, while the other is buy-side only for exchange-traded transactions. Traders also notice the effect of higher rates when they move from delivery to derivatives. Budget changes have made the derivatives STT rates a frequent topic. Another theme is that small percentage fees can add up with high volume. That is why people are trying to compute the all-in cost per trade.

STCG and LTCG: what triggers each rate

The capital gains tax depends on holding period, not on how many times you traded that day. For equity delivery, the common rule shared is based on the 12-month holding threshold. Every sell within 12 months is treated as short-term and triggers STCG at 20%. Every sell after 12 months is treated as long-term and triggers LTCG at 12.5% above Rs 1.25 lakh. The posts also note the effective date for this LTCG threshold rule as 23-07-2024. These are taxes on gains, so they depend on profit after considering purchase and sale price. They are not the same as STT, which is charged on the transaction value. Investors in these threads are using this framework to plan whether a trade is an investment or a shorter-term position.

STT: a tax on turnover, not on profit

Securities Transaction Tax is described as a direct tax levied by the central government. It is charged on the value of specified securities traded on recognised stock exchanges. Participants repeatedly highlight the key practical implication. STT applies to transaction value, not profit, so losing trades still pay STT. Another repeated clarification is that GST does not apply on STT. STT is also not available for input tax credit, as discussed in the context. The scope mentioned includes equity shares, equity mutual fund units, equity futures, options, and equity-oriented ETFs. Since it is applied at the transaction stage, it is visible on every contract note. This makes STT a central component in any trade cost calculation.

Post-April 2026 STT rates that traders are quoting

Budget 2026 changes are a major reason this topic is trending. Posts note that futures STT was raised from 0.02% to 0.05% on the sell side. They also note options STT increased to 0.15% from 0.125%. These changes are stated to be effective for trades executed on or after 1 April 2026. For equity delivery, the widely cited STT rate remains 0.1% on buy and 0.1% on sell. For equity intraday, the rate cited is 0.025% on the sell side only. Options have two references in the discussions, one for sale of option on premium and one for exercised or assigned cases. The table below consolidates the rates and the side charged as shared in these threads.

Stamp duty: buy-side levy that many forget

Stamp duty is described as a state-level duty on the transfer of securities. The threads emphasise that for exchange-traded transactions, it is charged on the buy side only. It is also described as being levied at order execution, which is why it appears immediately on the note. Several posts share a commonly used rate card that people apply for quick estimates. For delivery equity, the stamp duty rate quoted is 0.015% on the buy side. For equity intraday, the stamp duty rate quoted is 0.003% on the buy side. For equity futures, the rate quoted is 0.002% on the buy-side value. For equity options, the rate quoted is 0.003% on the buy-side value. Like STT, stamp duty is a statutory levy and does not attract GST.

SEBI turnover fee: microscopic, but still part of the bill

SEBI levies a regulatory turnover fee on the value traded. Social posts cite the fee as 0.0001% for non-debt securities, which is Rs 10 per crore. For debt securities, the cited rate is 0.000025%, which is Rs 2.5 per crore. Investors often call this charge “tiny” because it is almost invisible on a single trade. High-volume traders still track it because it is applied across buy and sell turnover. Another detail repeatedly mentioned is its GST treatment. From April 2025, SEBI turnover fees attract 18% GST. This makes the SEBI fee part of the GST base along with brokerage and exchange transaction charges. The practical takeaway from these threads is to not ignore the SEBI line item while estimating GST.

GST: what it applies to, and what it never touches

A recurring misconception online is that GST is charged on the value of securities. The discussions counter that securities are excluded from indirect taxation in India. GST is instead charged on services facilitating trading and investing. The commonly quoted rate is 18%. Importantly, GST is described as applying to brokerage and exchange transaction charges. The same discussions also state GST applies to SEBI turnover fees, especially after the April 2025 change. The point that gets repeated most often is negative, not positive. GST never applies to STT or to stamp duty, since both are statutory levies. Traders also note they are not required to register for GST unless they provide other services such as advisory or consultancy.

A checklist to estimate your all-in cost per trade

Threads summarise the “six charges” that show up on most Indian stock trades. They list brokerage, STT, exchange transaction charges, SEBI turnover fees, stamp duty, and GST. The calculation approach shared is to add all non-statutory service charges first. Then apply 18% GST on brokerage, exchange transaction charges, and the SEBI fee. After that, add STT and stamp duty separately because GST does not apply to them. One example circulated for a delivery trade shows how statutory taxes can dominate visible costs. It lists STT at 0.1% as Rs 1,000 on buy and Rs 1,000 on sell, and stamp duty at 0.015% as Rs 150 on the buy side. The same example shows SEBI turnover fee as Rs 1 on buy and Rs 1 on sell, and GST of Rs 5.35 on a combined base of Rs 29.70 for brokerage plus exchange charges. The key takeaway from these checklists is that your real cost is the sum of all six components, not just brokerage.