Many of you must be having a Share trading accounts in one or the other broking houses to trade your shares. You must be paying different broking charges with different plans as per company’s norms. But if you calculate the actual brokerage you will find the most invisible truth that you are paying up to ten times more than what you should pay.

There are numerous **Broking houses** like Angel Broking, ShareKhan, SMC, Kotak securities, IndiaBulls, etc. which offer you to open a share trading account in their companies to trade with the **Indian Stock market**.

At the time of opening broking house attract the customers with their unique plans of brokerage. One method is based on per share basis i.e. they asks 30paise per share on delivery trade and 3paise per share for intraday trading. Some offer 3paise/30paise per share or some may get down even to 1p/10p depending upon the customer and its financial strength and the second method is based on the percentage basis where they take brokerage on percentage calculation over the cost of share i.e. 0.03 % or 0.3%. Which method they apply on which share is unknown to you and the main problem arises when you trade for share below Rs.100.

**Considering the Intraday transaction:**

This can be understood with the following example:

Suppose if you buy a share which cost Rs. 10 per share and you buy 1000 shares of that company

Total Investment 10 x 1000= Rs. 10, 000

Then you pay brokerage 1000 x 0.03 = Rs. 30

But if they follow the percentage method then you will pay

10 x 1000x 0.03% = Rs.3

**!!! Ten times Higher You pay !!!**

Now if you buy 10 shares each of Rs. 1000 then

Total Investment 10 x 1000= Rs. 10, 000

But now the Company calculates this brokerage on the basis of percentage of per share cost i.e.

0.03% X 1000 X 10= Rs. 3

But if calculated on share quantity basis i.e. 3p/ share then you pay

0.03 x 10 = Rs. 0.3

**!!! Again Ten Times Higher !!!**

So you see whichever method you are applying the companies are taking 10 times more brokerage. They say that the brokerage can be calculated either by 3p/ share or by 0.03% of share cost, whichever is higher.

Whatever be the case you are being charged higher. If you are investing Rs. 10,000 in shares then buying shares above Rs. 100 can somewhat reduce your brokerage charge as on buying 1000 shares of Rs.10 you are paying Rs. 30 brokerage and on buying those 10 shares of Rs. 1000 you are paying Rs.3 as brokerage.

Moreover, some Trading Houses also apply a limit of minimum brokerage of Rs.10-Rs.25 on the day you trade. So even if your brokerage comes out to be less than Rs. 10 then also you have to pay more than that.

According to SEBI no broking house can charge above 2.5% but practically you are paying much more than 2.5%. For example, if your broking house is charging minimum of Rs.20 as brokerage and you buy a share for Rs. 100 only and you are paying Rs. 20 as a minimum brokerage which comes out to be 20%.

Overall, finding of the fact says that if you are a small investor then you have to suffer a lot in terms of brokerage. As said the Indian share market is just for the big tycoons who make their turnover in large numbers.