What are transaction charges, and how are they calculated by the NSE, the BSE, and MCX?

Transaction charges are levied by stock exchanges like NSE, BSE, and MCX on brokers for every trade executed. These are separate from taxes, brokerage fees, and SEBI charges.

Typically, these charges are calculated per crore of turnover. However, some exchanges, like BSE, apply a flat fee — for instance, ₹1.50 per trade. Since brokers pay these charges, they may either pass them on to you directly or include them as part of your overall trading cost.

The charges are calculated as a percentage of turnover.

Formula: Transaction Charge = (Turnover × Exchange Rate) / 10,000,000

Here’s a quick look at how each exchange calculates transaction charges:

Note: BSE recently revised its delivery trade charges to a flat ₹1.50 per trade. Earlier, it followed a percentage-based structure like the NSE. This new structure is especially beneficial for small-volume traders.