Understanding the DP Charges for Selling Shares on Kite Zerodha
When it comes to trading shares on Kite Zerodha, one of the important concepts to understand is DP charges. DP charges, or Debit Payment charges, are fees that you might come across as you navigate the stock market. This article will break down what DP charges are, how they apply to your trading activities, and how you can manage them effectively.
What Are DP Charges?
DP charges, or Debit Payment charges, are levied by the depository and its participants whenever you sell shares from your demat account. Essentially, these charges are a form of revenue collected by the depository CDSL and its partner Zerodha Broking Ltd. They are similar to transaction fees charged by exchanges or brokerage fees charged by brokers.
DP Charges on Equity Stocks
For equity stocks, the DP charge is Rs 13.5 per scrip charged on T2 days with 18% GST. The key takeaway here is that the charge is levied once per scrip on the day of sale, regardless of the quantity you sell. This means that if you sell multiple shares of the same scrip on the same day, you will only be charged once for that scrip.
It is also important to note that effective from May 3, 2019, DP charges for the redemption of mutual funds are no longer applicable. This means that if you are redeeming mutual funds, you will not incur any DP charges.
How DP Charges Are Handled
DP charges are directly recorded on your account ledger and do not appear on your contract note. These charges will be posted on your ledger on T2 day, which is two days after the date of sale. This means that you will need to manage your cash flow to ensure you have sufficient funds in your account to cover these charges.
Key Points to Remember
DP charges are charged per scrip on the day of sale, irrespective of the quantity of shares sold. Effective from May 3, 2019, redemption of mutual funds is not subject to DP charges. DP charges are recorded on your account ledger, not on your contract note. They are posted on T2 day (2 days after the sale date).Understanding the specifics of DP charges can help you make more informed investment decisions and manage your investments more effectively. By keeping these details in mind, you can ensure that you are fully prepared for any potential charges and can optimize your investments accordingly.
Note: The equity market is subject to market risk. Always invest with your own decision.
Happy Investing!