What Is a DP Charge and Why Do Brokers Take It?
Introduction
If you’re new to stock trading, you may be surprised by an extra fee called the DP charge when selling shares. Many traders don’t realize what it is or why it’s added. This guide explains what a DP charge is, when it’s applied, how much it costs, and which brokers charge more or less.
What Is a DP Charge?
DP (Depository Participant) charge is a fee charged by your broker (who acts as a DP) every time you sell shares from your demat account. It’s not related to trading or brokerage but to the settlement of your delivery-based trades.
This charge is levied by the depository (CDSL or NSDL) and passed on to you by your broker.
When Is the DP Charge Applied?
- Only on equity delivery sell trades (not intraday or F&O)
- It’s not charged on buying shares or selling on the same day (intraday)
- It is also charged per ISIN per day, not per quantity
Example: If you sell 10 shares of Tata Motors and 5 shares of HDFC on the same day, you’ll pay 2 DP charges, one for each stock (ISIN).
How Much Is the DP Charge?
Charges vary by broker and whether they use CDSL or NSDL.
| Broker | DP Charge (per ISIN/day) |
|---|---|
| Zerodha | ₹13.5 + GST (CDSL) |
| Upstox | ₹13.5 + GST (CDSL) |
| 5paisa | ₹12.5 + GST |
| ICICI Direct | ₹18.5 + GST (NSDL) |
| Angel One | ₹20 + GST |
| Groww | ₹13.5 + GST |
Why Do Brokers Take DP Charges?
Brokers act as intermediaries between you and the depository. When you sell delivery-based shares, your broker initiates the debit of those shares from your demat account. This action incurs a cost from the depository (like CDSL), and the broker passes that fee to you.
Think of it as a back-end handling fee for safely transferring your shares to the buyer.
How to Avoid DP Charges
While you can’t eliminate DP charges completely, here are some tips to reduce them:
- Avoid frequent delivery-based sell trades of multiple stocks on the same day
- Trade intraday if you’re short-term focused (no DP charge there)
- Consolidate sell orders to minimize the number of ISINs sold on a single day
Summary: Key Points About DP Charges
- Charged only on sell transactions of delivery trades
- Not applicable to intraday or derivatives
- Levied per ISIN per day, not per order or quantity
- Rates vary between ₹13.5 to ₹20 + GST
- Not shown in brokerage calculators but appears in your contract note
FAQs
1. Is DP charge deducted every time I sell shares?
Yes, but only if it’s a delivery sell. It doesn’t apply to intraday trades or derivatives.
2. Why am I being charged DP even when I sold only one stock?
Because the DP charge is per ISIN per day, not based on quantity or value.
3. Can I avoid DP charges with any broker?
No. All brokers charge it, but some offer slightly lower rates.
4. Is DP charge included in brokerage calculators?
Usually not. Most brokerage calculators show trading charges, but you’ll see the DP fee separately in your contract note.
5. Do I pay DP charges when I buy stocks?
No. You pay it only when selling delivery-based holdings.
