How is GST calculated on stock-market transactions?

GST in stock trading applies at 18% on the service components of a trade, mainly brokerage, and on certain exchange transaction charges and SEBI fees, not on the value of the shares themselves. So if brokerage on a trade works out to ₹20, GST adds roughly ₹3.60 on top of that, not 18% of the ₹50,000 trade value. This is a common misunderstanding you’ve seen, where someone estimates GST as a huge cost by applying it to the entire trade amount instead of just the taxable service charges. The exact taxable base can shift slightly if a broker restructures its fee components, so you check the contract note’s GST line rather than estimating it manually for anything beyond a rough back-of-envelope check.