Is DP charges applicable for intraday trading: In order to invest or trade in the stock market, one must have a Demat account. This Demat account enables an individual to buy or sell shares.

But having a Demat account and transacting through a Demat account comes with various charges. These charges will range from maintenance charges to charges incurred on stock transactions. One of these charges includes Depository Participant (DP) charges.

In this article, we will cover what is DP charges and is DP charges applicable for intraday trading.

What Is A Depository And Its Participants?

When you buy shares of various companies through your Demat account, those shares will be deposited in a place called the Depository. 

The two depositories of India are National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Limited (CDSL).

Each stockbroker supports clients in executing investment transactions while acting as an agent of the two depositories and they are called DP or Depository Participants.

What Are DP Charges?

DP charges stand for Depository Participant charges. They are the charges that are levied on all the sell transactions of your Demat Account. These charges are not reflected in the contract notes and are exclusive to brokerages.

These charges are a source of revenue for the depositories and their participants. These are flat transaction charges that are levied irrespective of the quantity sold. Hence the fees are charged per scrip and not on the volume sold. 

Who Levies DP Charges?

Depository as well as depository participant levy the DP charges on the investors. The Depository charges are levied by National Securities Depository Limited (NDSL) if the stocks are a party of Nifty and these charges are levied by Central Depository Securities Limited (CDSL) if the stock is a part BSE.

The stock brokers act as mediators between the depository and the investors while collecting the DP charges.

Why Are The DP Charges Levied?

In order to become a depository participant to provide Demat accounts to the clients, a stockbroker needs to pay a membership fee to NDSL or CDSL and also several other fixed costs along with advanced prepaid transaction charges in order to register with them. To reclaim these expenses, the broker passes down these charges to their customers.

The Amount Of DP Charges Levied

Following are the DP charges levied by the depositories on the sell transactions of the investors:

Demat transaction charges for CDSL: Rs. 13 plus Rs. 5.50

Demat transaction charges for NSDL: Rs. 13 plus Rs. 4.50

Is DP Charges Applicable For Intraday Trading?

As intraday trading involves buying and selling shares within the same trading day, the shares traded will not get credited to your Demat account. Hence, DP charges are not applicable for intraday trading as these charges are levied after the shares get credited to an investor’s Demat account.

Also Read: Intraday Trading With 1000 Rs – A Basic Guide For Day Trading!

In Closing

In this article, we discussed the Depository and its Participants, what is DP Charges, Who levies DP charges, why are the DP charges levied, the amount of DP charges levied, and is DP charges applicable for intraday trading.

Though there are no DP charges levied on intraday trading, there are various other charges like Securities Transaction Tax (STT), SEBI Regulatory Fee, Transaction Charges, Stamp Duty, and Brokerage & GST on Brokerage that is incurred on these trades. Knowing the various charges can help you determine their influence on profit margin in the end.

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