Algo Trading


Stock Market Blogs

Parking Money in Mutual Funds for Shorter Duration is Now Costlier July 03 2020Mutual Fund

Visit Count: 1115

Stamp Duty on Mutual Fund Investors from July 1st, 2020

From July 1st onwards there would be changes made to the stamp duty on financial securities. The government has recently made a press release regarding the changes that were to be made regarding the stamp duty. These changes were supposed to be made in January but got deferred to April and then July. From 1st July onwards you will have to pay 0.005 percent of stamp duty on purchase of mutual fund units. Its main implication would be when you purchase mutual fund units in lumpsum, SIP or STPs. This means that purchasing mutual funds for short duration would become costlier.

Let us take an example to understand it better.                


Suppose you purchase mutual fund units worth Rs. 1 lakh then the mutual fund company will issue you units for Rs. 99,995 and charge Rs. 5 towards paying the stamp duty. The stamp duty with different rates applies to all categories of funds like debt, gold, equity and hybrid.

Every Investor Will Have To Bear Stamp Duty

If a large investor purchases exchange-traded funds from a fund house, the stamp duty payable would be 0.005 percent. Similarly, ETF units that are bought from the stock exchanges will face stamp duty at the rate of 0.015 percent. If the units are issued to the investors under the dividend reinvestment plan, stamp duty would also apply to them. Dividend paid to the investor by the company would be treated as consideration and stamp duty on them would be taken from fund house out of the dividend amount before investors are issued with the units.

On redemption of your investments, no stamp duty is applicable. Also when the investor converts his physical holdings into demat mode, no stamp duty is charged.

What is Stamp Duty ?

Stamp duty is a one-time charge. The value of stamp duty is computed on the total value of the transaction. Therefore, if the investment period is very short, your returns will take a hit because of the stamp duty. As per the press note released by , the stamp duty of 0.005 percent will have an annualized impact of 1.82 percent on the investment that is made for one day. When the same investment is held for one month, the cost comes down to 0.06 percent.

It would not be wrong to say that the long term investors will be least impacted with the stamp duty. The major impact of the new stamp duty would be on the large investors who often invest in mutual funds for a day or two.


Mutual funds are known for giving good returns to the investors if held for the long term. If you are a newbie in the market or want to invest in mutual funds, you can visit Indira Securities. We will assist you in picking the best mutual fund plan after understanding your financial needs and goals. 

Blog Enquiry

Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.


  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost

Dear Investor,
As you are aware, under the rapidly evolving dynamics of financial markets, it is crucial for investors to remain updated and well-informed about various aspects of investing in securities market. In this connection, please find a link to the BSE Investor Protection Fund website where you will find some useful educative material in the form of text and videos, so as to become an informed investor.
We believe that an educated investor is a protected investor !!!

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
"No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorize your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
"KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary."
Dear Investor if you wish to revoke your un-executed eDis mandate, please mail us with ISIN and quantity on by today EOD."

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201




Indrendu Joshi. Email: Call : 0731-4797275

Investor grievance complaint :