Orders, Costs & Taxation

Here's something most investing education skips entirely: every trade you make has a real cost. Not just brokerage, there's STT, exchange charges, SEBI turnover fees, GST, and stamp duty all stacking up simultaneously. And when you exit with a profit, tax stacks on top of that.

For a buy and hold investor who trades once a year, these costs are minor. For a systematic strategy that rebalances every few weeks, they add up to a real number every year, and a strategy that looks great before costs can look very different after. I learned early to read every back test from the bottom line up: net of costs first, then everything else.

Here is the full picture: order types, every line of the cost of a trade, capital gains tax as it stands for FY 2026 to 27 under the new Income-tax Act, 2025, and tax loss harvesting. By the end you'll know what it actually costs to invest in Indian equities.

Order types, how you actually buy and sell

When you tap "Buy" in a broker app, you're placing an order. Which type you use matters, especially when markets are moving fast or the stock has thin liquidity.

The full cost of a trade

When you place a trade, you're paying multiple parties simultaneously. Most people notice only the brokerage, but the actual total cost includes six charges. Here's the complete breakdown for a round-trip on ₹1,00,000 of shares:

As a share of the ₹1,00,000 you invested, a full round trip costs about 0.24% to 0.29%, and STT alone is ₹200 of it. Notice what dominates. Not brokerage, which competition has driven to almost nothing. Tax. That is why the number of trades matters more than the broker you pick.

The individual charges explained

Brokerage: Flat fee brokers, now the norm in India, charge a fixed amount per order, often ₹20, whatever the order size. Some charge nothing on delivery trades. Percentage fee brokers charge 0.1% to 0.5%.

STT (Securities Transaction Tax): A government tax collected at source. For equity delivery trades: 0.1% on both buy and sell. For intraday trades: 0.025% on the sell side only. Budget 2026 raised STT on derivatives from 1 April 2026, futures to 0.05% and options to 0.15%, and left the equity delivery rate unchanged. STT is the largest unavoidable cost in equity investing.

Exchange Transaction Charges: Fees paid to NSE or BSE for their infrastructure. Since October 2024 SEBI has required one flat rate for everyone. NSE's cash market charge is ₹3.07 per lakh, or 0.00307%, on each side, including the investor protection fund contribution, under its circular effective 1 March 2026. Small but real.

SEBI Turnover Fee: ₹10 per crore of turnover. Negligible for most retail portfolios.

GST: 18% on brokerage, exchange charges and the SEBI fee. Not on STT or stamp duty, which are taxes, not service fees.

Depository (DP) charge: When shares leave your demat on a sale, the depository and your depository participant charge a fixed fee per stock per day, usually ₹15 to ₹20 including GST. It does not depend on the amount, which makes it painful on small sells.

Stamp Duty: Applies on the buy side only, at a uniform rate across India since 1 July 2020: 0.015% on delivery purchases and 0.003% on intraday purchases, collected through the exchange.

Capital gains taxation, how your profits are taxed

When you sell shares at a profit, the government takes a share. The rate depends mainly on how long you held them. The rates below came in with Budget 2024 for sales from 23 July 2024, and they carried over unchanged when the Income-tax Act, 2025 replaced the 1961 Act on 1 April 2026. The section numbers changed (the old 111A and 112A are now sections 196 and 198). The rates did not.

How LTCG is actually calculated

Tax loss harvesting, using losses to reduce your tax bill

Capital losses can be used to offset capital gains, reducing your tax liability. This is called tax loss harvesting.

• STCL (Short-Term Capital Loss) can offset both STCG and LTCG
• LTCL (Long-Term Capital Loss) can only offset LTCG, not STCG
• Unabsorbed losses can be carried forward for 8 financial years, but only if you file your return by the due date

Dividends and buybacks

Dividends are added to your income and taxed at your slab rate. The company deducts 10% TDS once your dividends from it cross ₹10,000 in a financial year; you claim that back against your final tax.

Buybacks changed twice in two years. From 1 October 2024 the whole buyback amount was taxed as a dividend. The Finance Act, 2026 reversed that from 1 April 2026: for ordinary shareholders, a buyback is again a sale, taxed as a capital gain on the profit over your cost. Promoters pay an extra levy on top.

How costs affect your real returns

Costs compound against you the same way returns compound for you. A strategy generating 18% CAGR before costs and taxes might deliver 13 to 15% after everything. The gap between gross and net return is what separates good strategy design from bad.

A worked example: one year of rebalancing, every rupee

Take a ₹10 lakh portfolio in a strategy that rebalances every four weeks, 13 times a year. Assume each rebalance sells ₹1.5 lakh of stocks and buys ₹1.5 lakh of new ones: ₹3 lakh of traded value, 30% of the portfolio. Ten stocks out, ten in.

Rates: STT and stamp duty as legislated; NSE transaction charge about ₹3 per lakh a side; SEBI fee ₹10 per crore; RupeeCase fee 0.2% of traded value as on the pricing page. Brokerage and DP charges vary by broker. Excludes slippage and tax on gains.

Look at where the money goes. With a zero brokerage broker the total drops to about ₹14,500, or 1.45%. Halve the turnover and almost every line halves with it. That is the real lever. When you compare any strategy, on RupeeCase or anywhere else, ask for its turnover and its returns net of costs, and do this sum yourself.

Then comes tax. Gains on stocks held 12 months or less are taxed at 20%. A strategy that rotates every few weeks realises mostly short term gains, so its after tax return depends a lot on your own situation. A strategy can beat its benchmark before tax and lose to it after. That is not a reason to avoid rotation. It is a reason to measure it honestly.

Common mistakes with costs and tax

How this shows up in RupeeCase

RupeeCase charges one fee: 0.2% of traded value, only when a rebalance trades. No subscription, no AUM fee, no profit share. Brokerage, STT, stamp duty and the rest go through your own broker at standard rates and show on your contract note, exactly as if you placed the orders by hand. The pricing page works through the fee for different portfolio sizes and cadences, and the fee calculator lets you plug in your own. Each strategy page states its rebalance cadence, for example every two weeks for Allcap and every four weeks for Nifty 50 Equal Weight.