When people invest in the online stock market, we are obliged to pay a couple of fees. Numerous new investors are unaware of what these fees are and why they have been imposed. Major one is DP Charges & people generally want to know what is DP charges after looking at their statement.
Let’s discuss them in detail with an example:
Table of Contents
What is DP Charges?
DP Charges stands for Depository Participant Charges. All sell transactions involving your Demat Account are subject to Depository Participant (DP) fees. These fees are in addition to brokerage and are not expressed in contract notes. Depositories and their participants earn money from these charges.
DP fees are a flat transaction charge that is applied regardless of the quantity sold. As a result, the fee charged is per stock rather than per volume sold. As a result, whether you sell one or one hundred stocks, these fees stay the same.
This is because the depository maintains a Demat account. A Demat account in India provided by two depositories: CDSL (Central Depository Services Limited) and NSDL (National Securities Depository Limited).
Charges
The Depository (CDSL or NSDL)0 and the Depository Participant (brokerage firm) charge Rs. 13.5 (+ 18% GST) per day per stock for equities sold from your holdings. On the day you place your sell order, the shares will be removed from your DEMAT account.
Example of depository charges
The overall relevant DP fees for that stock for the day will be Rs. 13.5 + 18 percent GST if you sell 100 securities of XYZ company in the early hours and 100 shares of X in the afternoon.
Due to stocks are being sold Two times, the overall relevant DP costs for the day will be Rs 13.5 + Rs 13.5 = Rs 27 + 18 percent GST if you sell 50 stocks of X in the morning and 50 stocks of Y in the afternoon.
Note
- The contract note does not include these charges because they are directly posted to the ledger. It is levied once per stock on a single day, regardless of the number of stocks sold.
- Because the stocks are credited to your Demat account and later debited, these charges will apply to BTST transactions, just as they would to standard delivery transactions.
Who imposes these charges?
Depositories and the depository participant both levy these charges. The tax is charged by National Securities Depository Limited (NSDL) if the stock is part of the Nifty index. The tax is imposed by Central Depository Securities Limited (CSDL) if the stock is listed on the BSE.
A depository participant (Brokerage firm) acts as a go-between for depositories and investors. Depository participants include banks, financial institutions, and stockbrokers.
Need to DP Charges
To offer customers a Demat account, a stockbroker must first become a depository participant.
Furthermore, they must pay a membership fee of lakhs to NDSL or CDSL, as well as various additional fixed prices and advanced prepayment transaction charges.
In order to recoup these costs, the brokers impose an extra fee to their consumers.
Key Points
- Irrespective of how many shares you sell, the Charges will stay the same.
- Whether you sell one or a hundred shares, the depository fee is calculated based on the number of shares sold.
- It’s also crucial to remember that, on top of the depository fees, each broker will have their own set of fees.
Conclusion
If you’re thinking about investing in the stock market, you should be aware of the various fees and charges that apply while trading.
This is all from our side regarding what is dp charges. Let us know your views in the comment section.
Other Interesting blogs related to what are dp charges:
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FAQ About dp charges in groww
How to avoid DP charges in Zerodha?
There is no possibility to avoid DP charges in Zerodha. You need to pay these charges for every sell transaction in delivery trading.
Lowest DP charges?
DP charges are the same for most of the discount brokerage firms. Which is around 13.5+ 18% GST.
Is DP charges applicable for intraday trading?
No, DP charges are not applicable for intraday trading. However, they are applicable on BTST trades.
When DP charges applicable?
DP charges are applicable on sell transactions in Delivery trading.
How to avoid DP charges in Upstox
There are no possibilities to avoid DP charges in Upstox. You need to pay these charges for every sell transaction in delivery trading.
