4 key components in a stock market contract note This typically includes details about the transaction, such as trade date, contract number, segment (equity, derivatives, etc.)
For every transaction on the stock exchange, the broker provides a contract note. Typically, the note is sent on the e-mail registered with the broker. It serves as a crucial record for transactions and costs. Here are the key components of a contract note.Trade information
The contract note begins with the trade information section. This typically includes details about the transaction, such as trade date, contract number, segment (equity, derivatives, etc.), quantity of securities bought or sold, name of the security, and the price at which the transaction was executed.
Brokerage charges
The contract note specifies the brokerage charges levied by the broker for carrying out the trade. It can be a percentage of trade value or a fixed amount charged on the transaction.
Taxes and other levies
The contract note specifies the taxes and charges applicable on the executed trades, such as securities transaction tax, goods and services tax, stamp duty, and exchange transaction charges. These charges are calculated on the basis of transaction value and are in accordance with Sebi regulations and other tax laws.
Payable, receivable
The contract note provides a summary of the net amount payable or receivable from trading activities. It takes into account the buy and sell transactions, brokerage charges, taxes, levies, and clearing charges. It is important to review this to know the financial impact of trades.
Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
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(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
This story originally appeared on: India Times - Author:Faqs of Insurances
