From October 1, 2024, stock exchanges in India stopped giving volume-based fee discounts to brokers. Every broker now pays the same flat transaction charge to NSE and BSE, regardless of how large or small they are. This change came from SEBI’s True to Label circular issued on July 1, 2024, and it restructured how transaction fees flow from the exchange to the broker to you. If you trade F&O, this directly affects what appears on your contract note. If you are new to F&O trading and want to understand how trading costs work before reading this article, start with our F&O Trading for Beginners guide.

What Is SEBI's True to Label Circular?

SEBI’s True to Label circular (Circular No. SEBI/HO/MRD/TPD-1/P/CIR/2024/92, dated July 1, 2024) mandates that any charge levied on the end client by a broker must be the same amount received by the Market Infrastructure Institution (MII).

MIIs covered under this circular include:

Stock exchanges: NSE and BSE
Clearing corporations: NSE Clearing and BSE Clearing
Depositories: CDSL and NSDL

The phrase “True to Label” means the charge on your contract note must reflect the actual charge collected by the exchange. A broker cannot collect Rs 50 from you and pay the exchange Rs 35, keeping Rs 15 quietly as income.

The Problem That Led to This Circular

Before October 2024, stock exchanges charged brokers using a slab-wise fee structure. Brokers with higher monthly trading volumes paid lower per-unit fees to the exchange. NSE’s options segment had six fee slabs. At the lowest slab, applicable to brokers with above Rs 2,000 crore monthly premium turnover, the charge was Rs 30 per lakh of premium. At the highest slab, applicable to brokers with a monthly turnover of below Rs 3 crore, the charge was Rs 2,500 per lakh.

Brokers charged clients a standard daily rate near the highest slab, then settled with the exchange at the end of the month at their actual, lower volume-based rate. The gap was a profit for the broker, and clients had no visibility into it.

For Zerodha alone, exchange rebates from this arrangement generated between Rs 1,000 crore and Rs 1,100 crore in FY24. Nithin Kamath, Zerodha’s founder, confirmed the company expected a 10% revenue dip when the circular took effect, on overall revenue of Rs 8,320 crore in FY24.

Angel One earned approximately Rs 400 crore from transaction charges in FY24 through the same mechanism. The industry-wide estimated revenue hit from eliminating rebates: Rs 2,000 crore annually.

Two Rules the Circular Introduced

The SEBI circular (SEBI/HO/MRD/TPD-1/P/CIR/2024/92) introduced two binding requirements for all MIIs:

Rule 1: Charges must match end to end

Whatever charge appears on your contract note as an exchange transaction fee must equal what the exchange receives from the broker on that trade. No portion can be retained by the broker as rebate income.

Rule 2: Uniform fee for all broker members

MIIs must apply the same flat transaction fee to every broker, regardless of trading volume. Volume-based slab pricing is abolished. A large platform like Zerodha and a small regional broker now pay the same rate to NSE or BSE.

Exact Charge Changes from October 1, 2024

These are verified numbers from HDFC Securities and Zerodha’s official charge revision notices:

NSE Charges

Segment	Before October 2024	After October 2024
Equity Delivery	Rs 3.22 per lakh (0.00322%)	Rs 2.97 per lakh (0.00297%)
Equity Intraday	Rs 3.22 per lakh (0.00322%)	Rs 2.97 per lakh (0.00297%)
F&O Futures	Rs 1.88 per lakh (0.00188%)	Rs 1.73 per lakh (0.00173%)
F&O Options (on premium)	Rs 49.5 per lakh (0.0495%)	Rs 35.03 per lakh (0.03503%)
Currency Futures	Rs 0.9 per lakh (0.0009%)	Rs 0.35 per lakh (0.00035%)
Currency Options	Rs 35 per lakh (0.035%)	Rs 31.1 per lakh (0.0311%)

BSE Charges (Options)

Segment	Before October 2024	After October 2024
F&O Options on Sensex and Bankex	Rs 49.5 per lakh (0.0495%)	Rs 32.5 per lakh (0.0325%)

The largest change sits in the options segment. NSE F&O options transaction charge dropped from Rs 49.5 per lakh of premium to Rs 35.03 per lakh. For a full breakdown of every charge that applies to your F&O trades, including STT, GST, and stamp duty, read our article on F&O trading costs and risk management.

Practical Example: Nifty Options Trade

You sell 10 lots of Nifty weekly options on expiry day. Total premium value: Rs 50,000.

Before October 2024:
NSE transaction charge at 0.0495% = Rs 24.75

Your broker paid the exchange roughly Rs 17.52 based on their volume slab. The Rs 7.23 difference stayed with the broker without your knowledge.

After October 2024:
NSE transaction charge at 0.03503% = Rs 17.52

The exchange collects this amount directly. The broker cannot charge you anything above this on the transaction charge line.

On a single trade of Rs 50,000 premium, you save approximately Rs 7 in transaction charges. For a trader placing 200 to 300 such trades across expiry sessions in a year, that amounts to meaningful savings.

The STT Change That Happened on the Same Date

On the same date, October 1, 2024, the Securities Transaction Tax (STT) on options selling increased from 0.0625% to 0.1%. STT is a government tax, completely separate from the exchange transaction charge.

This is the point most traders miss. The NSE options transaction charge fell, but STT on the sell side rose. For options sellers specifically, the net impact on total trading cost was not a straight reduction. You need to look at both changes together on your contract note to know your actual per-trade cost change. For a detailed explanation of how STT works on F&O trades and the latest rates, read our article on STT on F&O Trades.

How It Hit India's Biggest Brokers

Zerodha: Founder Nithin Kamath publicly stated the circular would cut Zerodha’s revenue by 10%. On FY24 revenue of Rs 8,320 crore, that translates to approximately Rs 832 crore in lost income. For Zerodha’s broking segment specifically, Kamath estimated the impact could be 30 to 50% of segment revenue.
Angel One: Angel One’s stock fell 10.50% intraday and closed 8.72% lower on July 2, 2024, the day after the circular was issued. The company earned about Rs 400 crore from transaction charges annually, most of which was at risk. By September 30, 2024, Angel One announced a flat fee of Rs 20 or 0.1% + GST (whichever is lower) on equity delivery trades, ending its free delivery model.
Groww and Upstox: Both had built low-cost or zero-brokerage models partly funded by exchange rebate income. The circular forced both to revisit their pricing structures.
Bank-backed brokers (ICICI Direct, HDFC Securities, Kotak Securities): These brokers were already passing exchange charges directly to clients without retaining any rebate. HDFC Securities’ Whole-Time Director Ashish Rathi confirmed: “We do not see any impact on revenues since true-to-label does not affect us; we were passing on the benefit on account of exchange transaction charges due to high volume to customers.”

Common Mistakes Traders Make About This Circular

Assuming all trading costs went down:
The transaction charge fell, but STT increased, and several brokers raised their brokerage to compensate for lost rebate income. Always check your full contract note, not just the transaction charge line.
Confusing brokerage with transaction charges:
Brokerage is what your broker charges for executing a trade. The transaction charge is what the exchange charges for market access. The True to Label circular governs only the transaction charge. Your broker sets the brokerage independently. Traders often overlook other hidden costs, too. Our article on bid-ask spread in options explains a cost that does not appear as a fee at all but affects every options trade.
Not checking your contract note after October 2024:
The NSE transaction charge for F&O options should now read approximately Rs 35.03 per lakh of premium, not Rs 49.5. If your note still shows the old figure, raise it with your broker.

How This Affects You as a Trader

If you trade F&O, you are most directly affected. Options transaction charges changed, STT changed, and your broker likely revised their pricing. Review your full charge structure using Alice Blue’s transparent brokerage calculator.
If you invest in equity delivery, the change exists (Rs 3.22 to Rs 2.97 per lakh) but is small in absolute terms. Long-term investors will see a marginal difference on their contract notes.
If you are a beginner, this circular works in your favour. You now pay a transparent, uniform fee — the same rate as any experienced trader on the same exchange. No hidden charges, no volume-based disadvantage. Before you begin trading F&O, understanding your complete cost structure is important. Our F&O Trading for Beginners guide covers every charge you will encounter.
If you trade through a bank-backed broker, minimal direct impact, since ICICI Direct, HDFC Securities, and Kotak Securities were already operating on a full pass-through model.

Conclusion

SEBI’s True to Label circular (SEBI/HO/MRD/TPD-1/P/CIR/2024/92) ended an arrangement where exchange rebates quietly boosted broker revenue while retail traders paid more than they should have. The scale of the change is reflected in the numbers: Zerodha stood to lose Rs 800 to Rs 1,100 crore in annual income, Angel One’s stock fell over 10% when the circular was announced, and the broader broking industry revenue impact was estimated at Rs 2,000 crore annually.

For traders, the step is straightforward. Open a recent contract note, go to the transaction charge line, and verify the number matches the revised NSE and BSE flat rates. If your broker is charging more than the exchange’s published uniform rate on that line, that is a discrepancy worth questioning.

Frequently Asked Questions

1. What is SEBI's True to Label circular?

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2. Why did Zerodha, Angel One, and Groww change their charges in 2024?

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3. Did NSE options charges go up or down after October 2024?

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4. Why were bank-backed brokers not affected by this circular?

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5. How do I check if my broker is following the circular?

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