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Last Update: 27th Nov 2019 

Discount brokers usually do not provide trade advice, unlike a full-service broker. But they provide extremely cheap brokerage on trading.

Discount brokers are a better option for investors and traders who frequently trade because of the lowest brokerage charged by the discount brokers. In this article, I have reviewed the top discount brokers available in India.

5 Best Discount Broker in India

#1. Zerodha Demat Account Review

Zerodha is the biggest discount broker in India having over 10 Lacs customer base and known for lower brokerage charges. Zerodha charges a fixed brokerage of Rs. 20 per trade irrespective of the trading volume.

Zerodha is a member of BSE, NSE, MCX & MCX-SX and allows you to trade

Zerodha Brokerage Charges

Zerodha offers 0% brokerage on Stock Delivery and a flat Rs. 20 per trade on Intraday Trades.

Zerodha Charges Details

Zerodha Margin

My Opinion about Zerodha

#2. Upstox Demat Account Review

Upstox (earlier known as RKSV securities) is a discount broker good for traders who look for low brokerage, high margins, and decent trading platforms.

What I like the most about Upstox, is their high tech and advanced trading platforms.

If you are looking for advanced and easy to use trading platforms you should go with Upstox. You would also get low brokerage charges and high margins which are key points for trading.

Upstox offers fixed brokerage of Rs. 20 per trade irrespective of the trade volume. You can read the complete upstox trading account review 

Upstox Brokerage Charges

Upstox offers 0% brokerage on the stock delivery

Here is the link to Open Account with Upstox

Call & trade service is also available at Rs. 20 per order.

Upstox Intraday Margin

Upstox Margin OC/OCO orders

My opinion about Upstox

#3. 5Paisa Discount Broker Review

5Paisa is the only discount broker in India that offers a flat fee of just Rs. 10 per trade. You can save huge money on brokerage charges if you trade high volumes regularly.

5Paisa allows you to trade on BSE, NSE, MCX, and MCX-SX exchanges.

The best thing about 5Paisa is its extremely fast and paperless account opening process. I was able to complete all the documentation just within 15 minutes.

5Paisa is best for traders who need access to an easy platform for trading or high volume trader who want to save money on brokerage charges.

Read full 5paisa rev

5Paisa Brokerage Charges Details

0% on stock delivery – Zero brokerage on long term investment

Flat Rs. 10 per trade (for day trading)

Detailed 5 Paisa Charges

5Paisa Margin / 5Paisa Leverage

My opinion about 5Paisa

#4. Wisdom Capital Review

Wisdom Capital offers 3 different plans freedom plan, pro plan and ultimate plan to the investors. The plans are different on the basis of brokerage charges and margin provided.

The freedom plan offers zero brokerage charges across all the segments but doesn’t provide a good margin.

The pro plan and ultimate plan are for higher margin requirement for which you would need to pay a little higher brokerage.

The annual maintenance charges for all the three accounts is the same.

Wisdom Capital Brokerage Charges

Call & Trade Charges at Rs. 20 per executed order

Wisdom Capital Margin

My opinion about Wisdom Capital

#5. Samco Review

Samco is known for low brokerage charges and high exposure, margin products and free trading products.

One unique feature about Samco is that you can take a loan against stocks and other financial products.

Samco is a member of BSE, NSE, MCX, MCX-SX & NCDEX and allows you to trade

Samco Brokerage Charges

Samco Margin

(*NRML = Normal margin)

My opinion about Samco

Conclusion

From the above list, I find Zerodha, Upstox and 5 Paisa to be best in term of brokerage charges, margins and trading platforms provided.

However, 5 Paisa charges for stock delivery, plus the Rs. 100 charges on call to trade is very costly. Hence, for Intraday trading, you can choose between Zerodha and Upstox.

Calculating income tax and filing income tax returns is simple and easy in India if your primary source of income is from salary.

You can file your income tax returns yourself without paying a fee to CA or tax consultant.

Latest Income Tax Rates for FY 2019-2020

The tax slabs and rates are applicable for residents salaried persons as well as for non-resident individuals.

The tax calculation for a salaried person less than 60 years of age.

Information You Need to Calculate Your Income Tax

The list of information which you need

How to Calculate Income Tax (with example)

Tax is applicable on the income after the exemptions and deductions.

Components of Salary

#1. Basic Salary

Basic salary is a fixed component and usually forms the major portion of the salary. Some components like PF and HRA depends on the basic salary (for example, PF is 12% of your basic salary).

#2. Dearness Allowances (DA)

Dearness allowance is a cost of living adjustment allowances paid to the government, PSU employees and pensioners. The DA percentage is calculated twice every year and the DA paid is fully taxable.

#3. House Rent Allowance (HRA)

HRA is for salaried persons living in a rented house. HRA can be fully or partially taxable. If you have your own accommodation or live with parents then HRA is fully taxable.

The deduction under HRA is taken as the least of the following amounts

• Actual HRA received
• 50% of (Basic + DA) for persons living in the metro and 40% in case person living in non-metro cities
• Actual rent paid less 10% of (Basic + DA)

The deduction can also be claimed under section 80GG even if your employer does not pay you HRA.

#4. Leave Travel Allowances (LTA)

LTA is an exemption provided for domestic travel only. You can claim an exemption for two actual journeys in a block of four calendar years. The current block period is 2018-21.

You if missed taking leave travel allowance in any block, then you are allowed to carry forward the exemption. But you need to avail them in the first calendar year of the next block.

#5. Special Allowances

These are income components provided over and above salary to meet specific expenses and are fully taxable.

In order to calculate income, all the salary components need to be added to arrive at a gross salary.

#5.1 Provident Fund – A retirement benefit where both you and your employer contribute 12% of the basic towards pension and provident fund. This amount is fully exempted from tax.

#5.2 Standard Deduction – which is recently introduced and covers expenses on conveyance and medical allowances. You can claim a standard deduction of Rs. 40,000 for FY 2018-19.

#5.3 Professional Tax – You are required to pay Rs. 2500 tax to the state government as a tax on employment.

Computation of Net Taxable Income

Step 1 – Calculating Gross Income

The gross income can be calculated by adding

You need to add interest income or income from other sources in the gross income.

Step 2 – Calculating Taxable Income

The taxable income can be obtained by subtracting

For details of various section 80 deductions available you can refer to “Tax saving deductions under section 80C”

Step 3 – Arriving at Net Taxable Income

Subtracting all the eligible deductions from the gross taxable income will help you arrive at the net taxable income.

Step 4 – Calculating Taxes

On this net taxable income, you are required to calculate and pay taxes as per the slab and rates applicable.

1st Slab

Which is first subtracting Rs. 2.5 Lacs for which you have to pay NIL taxes.

2nd Slab

In the second slab, any income over Rs. 2.5 Lacs up to Rs 5 Lacs is taken. Tax @ 5% is calculated on the income so taken.

3rd Slab

Income over Rs. 5 Lacs and up to Rs. 10 Lacs is considered in the 3rd slab and is taxed @ 20%.

4th Slab

Any income over Rs. 10 Lacs is taken and tax @ 30% is applied to get the income tax payable.

Step 5- Consolidate and apply rebate, surcharge and cess.

The income tax from all the slabs is added to arrive at a consolidated figure.

Surcharge: If your total income is between Rs. 50 Lacs to Rs. 1 Crore, then the applicable rate of surcharge is 10%. If your income is above Rs.1 Crore, then you need to pay a surcharge of 15%.

Cess: Health and education cess of 4%.

Rebate: You can claim rebate under Sec 87A if you are a resident individual with income up to Rs. 3.5 Lacs. The maximum rebate which you can claim is Rs. 2500.

Let us calculate income tax for various income groups with the help of a few examples.

#1. Calculation of Income Tax (Person with an annual salary of Rs. 3.5 Lacs)

Let us take a hypothetical example of Ravi, an employee with an annual salary of Rs. 3.5 Lacs as shown in the table.

Ravi lives in a non-metro city and during the year he received Rs. 60,000 as HRA whereas he actually pays 4000 rupees as rent per month.

He has also earned an interest income from the savings account of Rs. 500 over the last year.

Ravi’s income tax would be calculated in the following manner

We need to first calculate the exempted portion of HRA.

1. Actual HRA received = Rs. 60,000
2. 40% of basic pay + DA = (1,80,000 + 90,000) x 40 / 100 = Rs. 1,08,000
3. (Actual rent paid) – 10% of basic + DA = 48,000 – [(1,80,000 + 90,000) x 10 / 100] = Rs. 21,000

The lower of the above three ie. Rs. 21,000 is the exempt portion of HRA.

Ravi can have an exemption of Rs. 2500 as professional tax and Rs. 40,000 under the standard deduction.

His gross salary comes to Rs. 2,86,500. He needs to add the savings account interest income of Rs. 500. Thus, Ravi’s gross total income for the FY 2018-19 comes to Rs. 2,87,000.

Suppose he has not made any tax savings investments of expenses which qualifies for deduction under chapter VI A.

In fact, even after not making any investments he is not required to pay any taxes.

Let us see how

On the 1st slab, Ravi is exempted up to Rs. 2.5 Lacs. Hence he pays 0 taxes here.

On the remaining amount (2,87,000 – 2,50,000) of Rs. 37,000 he needs to pay tax @ of 5% as per the slab.

Total tax = 37,000 x 5 / 100 = Rs. 1850.

However, the total income of Ravi for the year was Rs. 3.5 Lacs, which makes him eligible for a rebate of Rs. 2500 under section 87A. The rebate will be Rs. 2500 or the tax amount up to Rs. 2500.

Hence, Ravi is eligible for a rebate of Rs. 1850 and he does not require to pay any income tax.

Note – You can not claim Rs. 650 (2500 – 1850) in view of the rebate.

#2. Calculation of Income Tax (Person with an annual salary of Rs. 8 Lacs)

Let us move ahead with another example. Suppose Reema is a software professional residing in Delhi.

In the last FY 2018-19, Reema received an annual salary of Rs. 8 Lacs. She paid rent of Rs. 8000 p.m and also received HRA @ 8000 per month.

Further, the bank credited Rs. 2500 as an interest in savings accounts for the last financial year.

Reema’s income tax calculation will involve the addition of Basic + DA + taxable HRA + Special allowances and other allowances.

Which will be reduced by the sum of professional tax paid and the standard deduction. Further, she needs to add interest income earned on savings accounts. You can see that her Gross total income comes to Rs. 7,22,800.

Now let us assume two scenarios.

1. Reema has not done any tax savings investment
2. She has made investments to save taxes.

Scenario 1 – (No Tax Savings)

Assuming that Reema has done nothing to save taxes, let us compute her tax liability.

At the first slab, she will be paying nil tax. At the second slab, Reema will be required to pay 5% tax on Rs. 2.5 lacs which is Rs. 12,500.

The remaining amount of Rs. 2,22,800 will fall under the 3rd slab and will be taxed @ 20%. The tax will be Rs. 44,560.

The total income tax will amount to Rs. 57,060. On which she needs to pay 4% cess i.e. 57,060 x 4 / 100 = Rs. 2282.40. (round off to 2280)

Hence the total income tax she needs to pay is Rs. (57,060 + 2280) = Rs. 59,340.

Scenario 2 – (With Tax Savings Investment)

Suppose, In order to save taxes Reema has invested Rs. 80,000 in PPF and 30,000 rupees in tax saving mutual funds.

Also in the last financial year 2018-19, she had paid a premium of Rs. 40,000 for a life insurance policy and paid Rs. 10,000 for medical insurance.

In such a case, Reema will be eligible for deductions under chapter VI A, which is as under

The Net taxable Income after deduction will be 7,22,800 – 1,62,500 = Rs. 5,60,300.

The income tax on which will be calculated as under

You can very well see above that the income tax for Reema has come down drastically from Rs. 57,060 to Rs. 24,560 when she made tax-saving investments.

Further, she needs to pay a 4% cess, which is 24,560 x 4 / 100 = Rs. 980 (rounded off).

The total income tax Reema needs to pay is Rs. 24,560 + Rs. 980 = Rs. 25, 540.

#3. Calculation of Income Tax (Person with an annual salary of Rs. 15 Lacs)

Now let us take a hypothetical example of Mr. Ajay who is a professional and resides in Mumbai and pays a monthly rental of Rs. 15,000.

During the last FY 2018-19 Ajay received a salary of Rs. 15 Lacs, the breakup of which is as under.

Ajay also got Rs. 9,000 as interest from the savings account.

The gross salary can be calculated by adding the taxable income under all the receipts and deducting professional taxes paid and the standard deduction.

Further, let us assume that Ajay has made the following investments / expenses to save taxes

Ajay also paid Rs. 10,000 for medical insurance for himself. Hence, he will be eligible for deductions under chapter VI A, which is as under

The Net Taxable Income after deduction will be 14,04,100 – 2,19,000 = Rs. 11,85,100.

The tax on which will be calculated as under.

Further, Ajay has to pay 4% cess on income tax which is 1,68,030 x 4 / 100 = Rs. 6,720 (rounded). Hence the income tax which Ajay needs to pay is = 1,68,030 + 6,720 = 1,74,750 rupees.

#4. Calculation of Income Tax (Person with an annual salary of Rs. 60 Lacs)

Let us take one more example of Mr. Yogesh who is employed in MNC and lives in Chennai. He lives in a rented house and pays 50,000 as rent per month.

Yogesh’s annual salary is Rs. 60 Lacs and break up which is as under.

Post deduction of professional taxes and standard deduction his gross total income comes to Rs. 58,16,500.

During the last financial year 2018-19, Yogesh has made the following investments in order to save taxes.

After deduction his net taxable salary would be 58,16,500 – 2,19,000 = Rs. 55,97,500.

The tax calculation for which will be NIL up to Rs. 2,50,000 on first slab.

@ 5% on Rs. 2,50,000 = Rs. 12,500 in the second slab.

@ 20% on Rs. 5,00,000 = Rs. 1,00,000 in the third slab

@ 30% on the rest of the amount of Rs. 45,97,500 which is Rs. 13,79,250.

On adding all the taxes of various slabs. The total income tax comes to Rs. 14,91,750.

Now since Yogesh earns more than Rs. 50 Lacs he has to pay a surcharge of 10% on the total taxes. The surcharge can be calculated @ 10% on Rs. 14,91,750 which will be Rs. 1,49,175.

Further, he needs to pay cess @ 4%. The amount of cess will be calculated on the sum of total taxes to be paid + surcharge. i.e. 14,91,750 + 1,49,175 = Rs. 16,40,925.

Cess @4% on Rs. 16,40,925 (i.e. 16,40,925 x 4 / 100) comes to Rs. 65,637.

Now summing up taxes + surcharge + cess (14,91,750 + 1,49,175 + 65,637) = Rs. 17,06,562. Which is the total income tax which Yogesh needs to pay.

Last Updated: 29 Nov, 2019

Upstox Review: Upstox (earlier known as RKSV Securities) is a discount broker, good for traders who look for low brokerages, high margins, and decent trading platforms.

Upstox offers fix brokerage of Rs. 20 per trade irrespective of the trading volume. You can save huge money on brokerage charges if you trade high volumes regularly.

You can open Upstox account by clicking this link

Let’s assume you do minimum monthly trading of 10,00,000 rupees with 10 trades (20 if we include buying & selling side)

Upstox is a member of BSE, NSE, MCX and MCX-SX and allows you to trade in:

What I liked about Upstox is their high tech and advanced trading platforms.

Upstox Brokerage Charges

Upstox offers 0% brokerage on stock delivery and a flat Rs. 20 per trade.

Detailed Upstox Charges

Margin OC/OCO orders

What I Like/ Didn’t Like about Upstox

Upstox Trading Platforms

#1. Upstox Pro Web

Upstox Pro web is a browser-based trading platform that comes with advanced features like API integration, algo trading, charts and technical indicators.

The features help you to perform in-depth analysis and market understanding.

#2. Upstox NEST Trader Desktop

NEST trader is an advanced trading desktop software which helps you monitor markets, place orders and buy & sell shares in real time.

Features of NEST Trader

#3. Upstox Pro Mobile App

You can track your favorite scripts, indices and monitor the markets using charting tools and more than 100 technical indicators.

My Experience with Account Opening Process (How to Open the Account with Upstox)

The account opening process of Upstox is very fast when compared to other discount brokers. The whole account opening process is online.

You can quickly open Upstox Demat and Trading account with the help of Aadhaar Card and PAN Card.

You just have to keep following documents handy to fast track your application.

You can start trading immediately without signing any documents. Upstox may take up to 48 hours to generate your trading login password (post completion of the application), but I got my password the very next day.

You only need to Sign PoA (Power of Attorney) document and courier to Upstox if you want to sell and transfer Mutual Funds & Shares through them.

Best For

If you are looking for easy and advance trading platforms you should go with Upstox.

Start Account Opening with Upstox

You would also get low brokerage charges and high margins which are key points for trading.