Contract Note

How it works

A contract note is the official confirmation a SEBI-registered broker sends after your trades are executed on a stock exchange. It must reach you within 24 hours of the trade and lists each order's security, quantity, buy/sell price, trade time, the unique trade and order numbers, and a full break-up of charges.

It is a legally enforceable record. If there is ever a dispute about what was bought, at what price, or what you were charged, the contract note is the primary evidence — which is why brokers digitally sign it and you may need a password (often a mix of your PAN and date of birth) to open the PDF.

In India

For Indian investors the contract note is also a tax and cost document. It itemises the layers of charges that sit on top of the trade price: brokerage, Securities Transaction Tax (STT), exchange transaction charges, SEBI turnover fees, stamp duty, and GST on brokerage and exchange charges.

This matters at tax time. The STT and the cost basis shown on contract notes feed directly into your capital gains computation, and the dates and prices help you separate short-term from long-term gains. Most discount brokers like Zerodha or Groww email a consolidated digital contract note daily.

Why it matters

Reading your contract note is the simplest way to verify you were charged correctly and that the executed price matches what you expected. The total "net amount" tells you the real cash that left or entered your account after all costs — frequently quite different from price times quantity.

Common mistakes

Many investors never open their contract notes and only see the net figure in the app. That hides how much friction (brokerage plus STT plus other charges) is eating into returns, especially for frequent traders. Another error is discarding them — keep contract notes for years, because they substantiate your purchase cost if the tax department questions your capital gains.