Charges IPFT investor protection fund trust NSE charges transaction charges zerodha exchange levy

IPFT charges

From WebNotes, a public knowledge base. Last updated 19 June 2026. Reading time ~13 min.

Key facts

Full form	Investor Protection Fund Trust, a trust set up by the National Stock Exchange
NSE equity and futures rate	Rs 0.01 per crore of turnover, plus 18 per cent GST (Zerodha IPFT charges support note, as of 19 June 2026)
NSE equity options rate	Rs 0.01 per crore of premium turnover, plus 18 per cent GST
NSE currency futures rate	Rs 0.05 per lakh of turnover, plus 18 per cent GST
NSE currency options rate	Rs 2 per lakh of premium, plus 18 per cent GST
BSE IPFT	BSE does not levy a separate IPFT line of this kind on Zerodha contract notes
Compensation cap	Up to Rs 25 lakh per investor per defaulting member, subject to fund sufficiency (NSE IPFT)
GST treatment	18 per cent GST applies on the IPFT levy as an exchange charge

Overview

The Investor Protection Fund Trust (IPFT) is a trust set up by the National Stock Exchange to compensate investors when a trading member defaults and the defaulting member’s own assets fall short of admitted claims. The IPFT charge is a per-turnover levy that NSE collects through brokers such as Zerodha and routes to the fund. On NSE equity and futures it runs to Rs 0.01 per crore of turnover plus 18 per cent GST (Zerodha IPFT charges support note, as of 19 June 2026). It is the smallest single item on a contract note, smaller than brokerage, STT, the exchange transaction charges and the SEBI turnover fee .

The fund behind the levy exists for one purpose: to pay investors who lose money because a stockbroker defaulted, up to a cap of Rs 25 lakh per investor per defaulting member, subject to the fund holding enough to meet the claim. The levy is tiny precisely because the fund is topped up across the whole market’s turnover; spread over crores of rupees of daily trade, a charge of Rs 0.01 per crore raises a meaningful pool while costing any single trader almost nothing.

This article explains what the IPFT is, the per-segment NSE rates as they appear on a Zerodha contract note, why GST applies, how the BSE position differs, and how small the charge is on a typical trade. It sits alongside the broader exchange transaction charges note and the Zerodha charges and hidden costs reference, and connects to the wider topic of investor protection in Indian markets.

What the IPFT is

The Investor Protection Fund Trust is the trust vehicle that holds and administers the National Stock Exchange’s Investor Protection Fund. The fund is a SEBI-mandated safety net at every recognised stock exchange. Its job is narrow and specific: when a trading member is declared a defaulter and expelled, and that member’s own deposits, margins and assets are not enough to settle what it owes its clients, the fund pays the shortfall up to a fixed per-investor cap.

The current cap on the NSE fund is Rs 25 lakh per investor per defaulting member. A claim is paid only after the defaulter committee admits it and only to the extent the fund has resources, so it is a backstop rather than a guarantee of full recovery. The fund does not cover trading losses, market falls, or bad investment decisions. It covers the specific event of a broker defaulting on its obligations to clients.

The trust structure separates the fund’s assets from the exchange’s own balance sheet, so that investor compensation money is ringfenced. This is why the levy is named after the trust rather than the exchange, and why it shows up as its own line on the contract note rather than being folded into the general transaction charge.

The per-segment NSE rates

The IPFT levy is charged per unit of turnover and differs by segment. The rates below are those Zerodha lists on its IPFT charges support note as appearing on the contract note (as of 19 June 2026):

Segment	IPFT rate	Plus GST
NSE equity (cash)	Rs 0.01 per crore of turnover	18%
NSE equity futures	Rs 0.01 per crore of turnover	18%
NSE equity options	Rs 0.01 per crore of premium turnover	18%
NSE currency futures	Rs 0.05 per lakh of turnover	18%
NSE currency options	Rs 2 per lakh of premium	18%

For equity and equity derivatives the levy is denominated per crore, which is what makes it almost invisible on a retail-sized trade. The currency segment rates are denominated per lakh, so they are arithmetically larger per rupee of turnover, but currency derivatives are themselves small-ticket and the absolute amounts stay modest. Options levies, in both equity and currency, apply to premium turnover rather than notional contract value, which keeps the base small.

These figures are NSE levies. A trader checking a Zerodha contract note will find the IPFT amount listed under the exchange charges break-up, separate from the brokerage line and the STT line.

GST on the IPFT levy

The IPFT charge is treated as an exchange charge for tax purposes, so 18 per cent GST applies on it. GST on Zerodha trades is levied at 18 per cent on the sum of brokerage, exchange transaction charges, the SEBI turnover fee and IPFT, the components covered in the Zerodha hidden charges note. STT and stamp duty are outside the GST base because they are themselves taxes. IPFT, being an exchange levy rather than a tax, sits inside the GST base.

In rupee terms the GST on IPFT is negligible. Eighteen per cent of Rs 0.01 per crore is Rs 0.0018 per crore, a number that rounds away on any normal trade. It is included on the contract note for completeness and to keep the GST computation exact, not because it moves the total.

How BSE differs

The Bombay Stock Exchange operates its own investor protection fund, mandated by the same SEBI framework that requires every recognised exchange to maintain one. On Zerodha contract notes, however, the IPFT levy appears as an NSE charge, and there is no separate BSE IPFT line of the same form in the Zerodha charges break-up (Zerodha IPFT charges support note, as of 19 June 2026). A trade routed to BSE carries BSE transaction charges and the same statutory levies, STT, the SEBI turnover fee, stamp duty and GST, but not a distinct IPFT line of the NSE kind.

The underlying protection still exists for BSE-routed trades through BSE’s own fund. What differs is the contract-note presentation: the named, per-crore IPFT line is an NSE feature on the Zerodha break-up.

How small it is on a typical trade

The IPFT levy is best understood by scale. On a Rs 1,00,000 NSE equity trade, the IPFT charge at Rs 0.01 per crore is Rs 0.01 multiplied by 0.01 crore, which is Rs 0.0001, plus GST. That is one-hundredth of a paisa. On a Rs 10 lakh trade it is one-tenth of a paisa. Even a Rs 1 crore turnover trade attracts only Rs 0.01 of IPFT plus GST.

Set this against the other lines on the same contract note. On that Rs 1,00,000 delivery buy, STT alone is 0.1 per cent, or Rs 100. Exchange transaction charges on NSE equity run to Rs 0.00307 per cent of turnover. The SEBI turnover fee is Rs 10 per crore, which on Rs 1,00,000 is Rs 0.001. IPFT at Rs 0.01 per crore is one-tenth of even the SEBI fee. It is the floor of the charge stack, a rounding-level item that a trader will rarely notice and that never materially changes net returns.

The point of documenting it is completeness, not cost management. A trader auditing a contract note will see the IPFT line and should know it is the NSE investor-compensation levy, that it is tiny by design, and that it is not a charge Zerodha sets or keeps. The way to reduce trading costs is to focus on brokerage, STT, the DP charge and exchange transaction charges, the lines in the hidden charges note, not the IPFT, which cannot be reduced and barely registers.

Where IPFT sits in the charge stack

Ordered by size on a typical equity trade, the charge stack runs STT first, then brokerage where any applies, then exchange transaction charges, then stamp duty on the buy, then the SEBI turnover fee, then GST on the brokerage-plus-exchange-plus-SEBI-plus-IPFT base, and finally IPFT at the bottom. The DP charge of Rs 15.34 per scrip applies separately on delivery sells. The IPFT and the SEBI turnover fee are the two pass-through regulatory levies that fund market infrastructure and investor protection rather than broker or exchange operations; the IPFT is the smaller of the two.

Unlike clearing, where Zerodha levies nothing because it is a self-clearing member, the IPFT is a genuine pass-through that does appear on the contract note, just at a level so small it is immaterial. The clearing charges note covers why some cost lines that exist at other brokers are absent at Zerodha; IPFT is the opposite case, a line that exists but is negligible.

External references

References

SEBI (Stock Exchanges and Clearing Corporations) Regulations, on the investor protection fund requirement at recognised exchanges.
NSE Investor Protection Fund Trust rules, compensation cap of Rs 25 lakh per investor per defaulting member.
Zerodha IPFT charges support note, as of 19 June 2026.

Frequently asked questions

What does IPFT stand for?

IPFT stands for Investor Protection Fund Trust. It is a trust set up by the National Stock Exchange that compensates investors when a trading member defaults and the defaulter’s own assets are not enough to meet admitted claims, up to a cap per investor.

How much is the IPFT charge on an NSE equity trade?

Rs 0.01 per crore of turnover, plus 18 per cent GST, per the Zerodha IPFT support note as of 19 June 2026. On a Rs 1 lakh trade that works out to a fraction of a paisa, the smallest line on the contract note.

Does BSE charge IPFT the way NSE does?

BSE runs its own investor protection fund, but Zerodha contract notes carry the IPFT levy as an NSE charge. There is no separate BSE IPFT line of this form on the Zerodha charges break-up.

Is GST applied on the IPFT charge?

Yes. The IPFT levy is treated as an exchange charge, so 18 per cent GST applies on it, alongside the GST charged on brokerage, transaction charges and the SEBI turnover fee.

Is IPFT a charge that Zerodha keeps?

No. IPFT is an NSE levy collected by the broker and passed through to the exchange. Zerodha does not retain it. It funds investor compensation in member-default cases, not broker revenue.

How much does IPFT add to my total trading cost?

Almost nothing. At Rs 0.01 per crore on equity, the IPFT line is the smallest item on a Zerodha contract note, far below brokerage, STT, exchange transaction charges and the SEBI turnover fee. It exists for completeness, not as a meaningful cost.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 19 June 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.