Definition
Stamp Duty (Securities)
Stamp duty is a small statutory charge levied on the purchase of securities, now collected uniformly at the time of trade.
Since July 2020, stamp duty on securities is levied at uniform rates across India and collected by the exchange/clearing corporation at the buy side only, e.g., 0.015% on delivery equity and 0.003% on intraday, plus separate rates for F&O and other instruments.
Though small, stamp duty (along with STT, GST, and exchange fees) adds to your transaction cost and appears on the contract note. The earlier state-wise patchwork was replaced by a centralised, uniform mechanism, simplifying compliance for investors.
Related terms
- Contract NoteA contract note is the legal document your broker issues confirming the details of trades executed on your behalf each day.
- Securities Transaction Tax (STT)Securities Transaction Tax is a small tax levied on the purchase and sale of securities like listed shares and derivatives on Indian stock exchanges, collected at the time of trade.
- BrokerageBrokerage is the fee your stockbroker charges for executing your buy and sell orders, and it is only one part of your total trading cost.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.