'Equity Delivery Will Continue To Be Free': Zerodha CEO Nithin Kamath Details New F&O Brokerage Costs And STT Hike Effective October 1

In a recent LinkedIn post, Zerodha CEO Nithin Kamath announced that there will be no changes to equity delivery brokerage while traders in the futures and options (F&O) segment will face adjusted costs starting October 1, 2024.

In his post, Kamath wrote, "Equity delivery will continue to be free at Zerodha. As of now, we are not making any changes to our brokerage."

What’s Changing for Options Traders?

For options traders, the Securities Transaction Tax (STT) will rise. The STT on the sale of options will jump from 0.0625 per cent to 0.1 per cent of the premium. This hike means traders will now pay a higher tax on their trades. However, to balance the increase, the transaction charge on options trading will reduce from 0.0495 per cent to 0.035 per cent.

Kamath, in his post explained, “For options, the STT has increased to 0.1% from 0.0625%, while the transaction charge has decreased to 0.035% from 0.0495%. This results in a net increase of 0.02303%, or ₹2,303 per crore of premium on the NSE, and 0.0205%, or ₹2,050 per crore on the BSE.”

Futures Traders to Face Larger Impact

“For futures, STT increases to 0.02% from 0.0125%, and transaction charge decreases to 0.00173% from 0.00183%. This results in a net increase of 0.00735% or ₹735 per crore of futures turnover,” Kamath noted.

“Since STT is charged on the entire contract value for futures, whereas in options, it is charged only on the premium, the impact will be much larger for futures traders,” he added.

"You can check out our brokerage calculator to see the new charges," added Kamath.

New Transaction Fees from NSE and BSE

To add to the changes in taxes and charges, both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) are implementing a new transaction fee structure starting October 1.

- In the cash market, the NSE will charge Rs 2.97 per lakh of traded value on each side.

- For equity futures, the fee will be Rs 1.73 per lakh on each side.

- For equity options, traders will face a fee of Rs 35.03 per lakh of premium value.