Stamp Duty
A duty levied on the buy side of securities transactions, at rates uniform across India since 2020.
Formula
Stamp Duty = Buy-Side Transaction Value x Applicable Rate, which differs by segment
Unit
%
In depth
Before 2020 stamp duty rates varied by state and were collected inconsistently; the unified regime made rates uniform nationally and collection centralised through the exchanges and depositories. It is charged only on the buy side, unlike STT, which applies to both legs in the delivery segment. Rates differ between delivery, intraday and derivative transactions, with delivery attracting the highest. It appears as a separate line on the contract note and is small in percentage terms but not zero, particularly for high-turnover strategies.
Worked example
At a delivery rate of 0.015%, a ₹1,00,000 purchase attracts ₹15 of stamp duty. On a portfolio turned over four times a year at ₹20,00,000 of purchases, the annual figure is ₹300.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Stamp Duty” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.