Ahead of the higher securities transaction tax (STT) on derivatives set to kick in from April 1, most brokerages are avoiding broad-based hikes to protect trading volumes and client activity, opting instead for selective changes.
The Union Budget had proposed raising STT on derivatives, on options, the tax on sale of options is set to rise to 0.1 per cent from 0.0625 per cent, while on futures, STT will increase to 0.02 per cent from 0.0125 per cent, lifting transaction costs in a segment already sensitive to pricing.
Zerodha has scaled back its proposed brokerage increase, restricting an additional ₹20 per order only to traders using pledged collateral without maintaining at least 50 per cent of margin in cash or cash equivalents, and only where the shortfall exceeds ₹5 lakh. The firm said this will impact less than 1 per cent of its active derivatives client base. Earlier plans to double brokerage for all such clients had triggered backlash, prompting the revision.
Meanwhile, Kotak Securities and Choice Broking have not altered their charges. “Our pricing remains unchanged,” said Sandip Chordia, COO at Kotak Securities, adding that predictability remains key for clients. The firm continues to charge a flat ₹10 per order in F&O trades, intraday or carry forward.
There are no conditions on margin, including cash, collateral, or a mix. No interest is charged on intraday collateral trades, while carry-forward funded margin is priced at 8.99 per cent per annum, Chordia said.
Angel One had already reset its pricing structure last year, increasing the minimum charge per order to ₹5 from ₹2 in the cash segment while retaining the “lower of ₹20 or percentage-based fee” framework.
The pricing stance comes even as brokers grapple with higher funding requirements linked to margin rules mandated by Securities and Exchange Board of India, which require at least 50 per cent of collateral to be maintained in cash or equivalents. As more traders rely on pledged securities, brokers have had to fund the cash component, increasing capital costs.
Industry body Association of National Exchanges Members of India had urged the Finance Ministry to roll back the STT hike, raising concerns about higher transaction costs impacting liquidity and retail participation in derivatives.
“The hike will impact retail and high-frequency traders as their transaction cost will go up substantially. Transaction cost changes may influence certain trading strategies at the margin; the broader participation trend remains intact,” said Shrey Jain, CEO, Stocko by InCred Money.