Depository Participant charges

Every time an investor sells shares, the shares held in electronic form have to move out of their demat account — and that movement is not free. Depository Participant charges are the fee levied for it.

Investors cannot approach NSDL or CDSL, India's two depositories, directly. They go through a Depository Participant (DP) — the bridge between the investor and the depository — and the depository's charge is passed on to the investor by the DP.

When it is charged. DP charges are levied on the day the securities are debited from the demat account — that is, on a sale, not on a purchase. Shares moving into a demat account on a buy do not attract this charge the same way.

How it is charged. The workbook describes it as a charge plus GST, levied irrespective of quantity — so selling 10 shares or 10,000 shares in a single debit event draws the same flat DP charge, not a per-share fee. GST on brokerage, exchange transaction charges and clearing charges is currently levied at 18%.

Where it sits in the cost stack. DP charges are one of several costs the workbook lists for buying and selling listed equity — alongside brokerage (charged by the broker), STT (levied on the transaction value), stamp duty (unified nationally since 1 April 2020), exchange transaction charges, and SEBI turnover charges (a flat Rs 10 per crore of turnover, charged on both legs of a trade). None of these charges are deductible in computing capital gains except where they can be shown as expenditure wholly and exclusively incurred in connection with the transfer.

Illustrative figures.

Ms Vaidya sells 200 shares of a listed company from her demat account in one transaction. Her broker's DP levies a flat charge of Rs 15.93 plus 18% GST (roughly Rs 18.80 total) for that single debit event — the same flat amount she would have paid had she sold just 5 shares, or 2,000 shares, in one debit, because the charge does not scale with quantity.

If, later that month, she sells another 50 shares of a different company in a separate transaction, a second DP charge is levied — because it is charged per debit event (per scrip, per day, broadly), not once a month regardless of how many separate sales occur.

Chapter 11 (Taxation of Equity Products), section 11.2.1, "Charges & Taxes," lists DP charges alongside brokerage, STT, stamp duty, exchange charges and SEBI turnover charges as the cost components of trading listed equity shares. Expect a question distinguishing which of these charges apply on purchase, sale, or both.

• DP charges apply on a sale (debit from demat), not on a purchase.
• The charge is flat per debit event, irrespective of the number of shares — it does not scale with the value or quantity sold.
• Investors cannot deal with NSDL/CDSL directly — the DP is the mandatory intermediary, and the charge flows from depository, to DP, to investor.
• GST (currently 18%) applies on top of brokerage, exchange charges and clearing charges — DP charges attract GST as well.
• Do not confuse with the Designated Depository Participant, a different, SEBI-registered role for onboarding foreign portfolio investors.