SEBI turnover fee on stock exchange transactions
Overview
The Securities and Exchange Board of India (SEBI) levies a turnover fee on all transactions executed on recognised stock exchanges in India. The fee is currently set at 0.0001 percent (equivalent to Rs 10 per crore of turnover, or Re 0.10 per lakh) and is collected by the exchange from the broker on behalf of SEBI, which then passes the cost to clients as a line item on the contract note. At Zerodha, the SEBI turnover fee appears separately on contract notes and in the Kite trading platform’s charges breakdown.
The fee applies across all market segments – equity cash (delivery and intraday), equity futures, equity options, currency derivatives, and commodity derivatives – at the same rate. It is not a tax in the constitutional sense; it is a regulatory fee under the SEBI Act 1992, and it is not deductible as a statutory tax. It is, however, treated as a business expense for traders assessed under business income.
Legal basis
SEBI derives its power to levy fees from Section 11(2)(f) of the SEBI Act 1992, which empowers SEBI to regulate stock exchanges and other securities intermediaries, and from the SEBI (Intermediaries) Regulations. The specific turnover fee rate for each category of transaction is set by SEBI’s Board and notified through circulars. The current rate of 0.0001 percent was established through SEBI circulars applicable from FY 2023-24.
SEBI uses fee revenue to fund its operations including regulatory supervision, investor education, enforcement, and market development activities. A portion of the revenue is also transferred to the SEBI Investor Protection and Education Fund (IPEF), which in turn funds investor awareness initiatives.
Rate and calculation
The SEBI turnover fee is charged on gross turnover (the total traded value, not the net) on each side of a transaction:
- Equity delivery: 0.0001% per side (buy and sell)
- Equity intraday: 0.0001% per side
- Equity futures: 0.0001% per side (on contract/notional value)
- Equity options: 0.0001% per side (on premium)
- Currency futures and options: 0.0001% per side
- Commodity futures and options: 0.0001% per side
For a Rs 1,00,000 equity trade, the fee per side is Rs 0.10. On a Rs 10,00,000 trade, it is Rs 1.00. The absolute amounts are small on individual trades but aggregate to significant sums across Zerodha’s total client turnover.
Historical rate changes
SEBI has revised the turnover fee rate multiple times since the fee was first introduced. Earlier structures included different rates for different segments and for exchange versus depositories. From FY 2023-24, SEBI moved to a uniform Rs 10 per crore rate across most segments, simplifying the schedule. The rate has been stable since then through FY 2025-26.
How it appears on the contract note
On Zerodha’s contract notes, the SEBI turnover fee is listed as a separate line item, distinct from brokerage, exchange transaction charges, GST, STT, stamp duty, and the IPFT levy. This itemised disclosure is mandated by SEBI’s master circular for stock brokers, which requires all charges to be shown transparently.
GST at 18 percent is charged on the SEBI turnover fee as part of the GST base (brokerage + exchange charges + SEBI fee). This makes the effective cost of the SEBI fee 0.0001% + 18% of 0.0001% = 0.000118% of turnover.
Comparison with other statutory levies
The SEBI turnover fee is the smallest of the standard statutory levies on Zerodha trades. For a Rs 1,00,000 equity delivery round trip:
| Levy | Amount per side (Rs) | Total round trip (Rs) |
|---|---|---|
| STT | 100.00 | 200.00 |
| Exchange charge (NSE) | 2.97 | 5.94 |
| GST on charges | ~0.55 | ~1.10 |
| Stamp duty (buy only) | 15.00 | 15.00 |
| IPFT | 0.10 | 0.20 |
| SEBI turnover fee | 0.10 | 0.20 |
The SEBI turnover fee and IPFT are roughly equal in magnitude and together represent a very small fraction of total transaction costs.
Treatment for income tax
For investors assessed under the capital gains regime, the SEBI turnover fee is part of the incidental cost of acquiring or selling securities and can be factored into the cost of acquisition or sale proceeds. It is not separately deductible but reduces the net capital gain.
For traders assessed under business income, the SEBI turnover fee is deductible as an expense in computing taxable business income.
Relation to IPFT levy
The Investor Protection and Education Fund Trust (IPFT) levy is a separate charge also collected by exchanges and appears alongside the SEBI turnover fee. These two are sometimes conflated because both are small, exchange-collected regulatory fees. They are distinct: the SEBI fee funds SEBI’s general operations, while the IPFT levy specifically funds investor protection and education activities. See IPFT levy for details.
Applicability to Zerodha clients
Every Zerodha client incurs the SEBI turnover fee on every executed trade, regardless of segment, account type (resident, NRI, corporate), or whether the trade is profitable. There are no exemptions for small traders, retail investors, or particular security types. The fee applies equally to NSE, BSE, and MCX trades. It is non-negotiable and identical across all brokers in India because it is set by SEBI, not by the broker.
See also
- Zerodha brokerage structure overview
- IPFT levy on Zerodha trades
- Exchange transaction charges
- GST on broking charges
- STT and CTT on Zerodha
- SEBI
- Zerodha
- National Stock Exchange
- Bombay Stock Exchange
References
- SEBI Act 1992, Section 11(2)(f)
- SEBI Circular on schedule of fees – SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/85 (FY 2023-24 fee revision)
- SEBI Master Circular for Stock Brokers, SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/72
- Zerodha Charges page, support.zerodha.com/category/charges (accessed May 2026)
- CGST Act 2017, Section 9 – applicability of GST on regulatory fees