how to buy stocks in india: complete guide

How to buy stocks in India — practical guide

If you want to know how to buy stocks in India, this guide explains the full process from required documents and account setup to placing orders, settlements, fees and tax treatment. Read on to learn the differences between primary and secondary markets, the role of SEBI/NSE/BSE, how to open Demat and trading accounts, safe trading practices, and how to use modern platforms such as Bitget for executing and managing Indian equity trades.

Overview of the Indian equity market

The phrase how to buy stocks in India refers to purchasing equity shares listed on Indian exchanges — primarily the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The market has two broad segments: the primary market (initial public offerings or IPOs) where new shares are issued, and the secondary market (exchange trading) where investors buy and sell existing shares.

Key participants include retail and institutional investors, registered brokers, clearing corporations, and depositories (NSDL and CDSL) that hold securities in electronic (Demat) form. SEBI (Securities and Exchange Board of India) is the regulator responsible for investor protection, market integrity and rule‑making.

截至 27 January 2023，据 NSE India 公告，印度主要股票的结算周期已由此前的 T+2/ T+3 大规模转向更快的 T+1 结算（适用范围按交易品种和监管安排）。截至 31 December 2025，据 NSE India 报道，印度股票市场的日均成交额在市场活跃期常常超过 INR 1 lakh crore（受市况影响）。

Common instruments available to retail investors include equities (shares), ETFs (exchange‑traded funds), REITs and listed derivatives (futures and options). Understanding settlement norms, trading sessions and instrument types is essential before you place orders.

Legal and regulatory framework

SEBI sets and enforces market rules covering registration of intermediaries, continuous disclosure by listed companies, insider trading prevention, and investor redressal. Retail investors must complete KYC (Know Your Customer) checks with a registered broker and maintain PAN (Permanent Account Number) for taxation and identification.

Investor protection measures include segregation of client funds, mandated disclosures by brokers and listed companies, circuit breakers to limit market volatility, and compensation mechanisms in limited cases. For grievances, the escalation path generally follows: broker support → exchange grievance cell → SEBI SCORES portal → Office of the Ombudsman (as applicable).

Regulations that directly affect retail investors include KYC and anti‑money‑laundering requirements, short‑selling and margin rules, continuous listing obligations for companies, and reporting standards for derivatives. Brokers and trading platforms must be registered with SEBI; verify registration before onboarding.

Prerequisites to buy stocks in India

Identity and tax documents

To buy stocks in India you must provide standard identity and tax documents. Core documents include:

• PAN (mandatory) — used for tax reporting, capital gains calculations and linking across financial services.
• Proof of identity and address — Aadhaar, passport, voter ID, or driver’s licence as accepted by your broker and DP (Depository Participant).
• Bank account details — cancelled cheque or bank statement to link for funds settlement and mandates such as ASBA (for IPOs) or UPI mandates.

Accounts you must have

Buying and holding equities in India requires two linked accounts:

• Demat account (depository account): holds securities electronically. NSDL and CDSL are the two central depositories; a DP (Depository Participant) operates your Demat account. Each holding has an ISIN and is credited/debited in electronic form.
• Trading account: used to place buy/sell orders on exchanges. Trading accounts connect to your broker’s platform and route orders to exchange matching engines.

Both accounts must be linked to a bank account for funds settlement. Many brokers offer a bundled Demat + trading + bank linkage onboarding. Bitget’s trading products and Bitget Wallet can be used alongside a Demat/trading setup for custody and operational convenience (see Choosing trading platforms and tools).

Choosing the type of broker

There are two common broker models:

• Full‑service brokers: provide research, advisory, wealth management, in‑house banking services and broader support. They typically charge higher brokerage but may suit investors seeking advisory and long‑term portfolio services.
• Discount brokers: offer lower brokerage, often with simple pricing (flat fee per trade or low percentage). These are popular for self‑directed investors who prioritize low costs and fast platforms.

Factors to evaluate when choosing a broker:

• Brokerage and fee structure (flat vs percentage)
• Platform stability and speed (mobile/web latency)
• Research and educational resources
• Margin and leverage facilities (if you plan intraday/F&O trading)
• Customer support, dispute handling and regulatory compliance
• Ease of account opening and e‑KYC options

Bitget provides a modern trading interface and product suite tailored to active traders and investors, with emphasis on security and customer support—consider platform reliability alongside costs.

How to open and activate accounts (step‑by‑step)

KYC and e‑KYC process

Most brokers offer online onboarding with e‑KYC. Typical steps:

1. Fill out application: provide PAN, Aadhaar (or other ID), address proof, bank details and nomination information.
2. e‑KYC verification: Many brokers use Aadhaar OTP, video KYC or in‑person verification depending on customer profile and broker risk policies.
3. Upload documents: scanned PAN, Aadhaar/passport/driver’s licence and cancelled cheque/bank statement.
4. In‑person verification (if required): a broker representative or DP might complete IPV (In Person Verification) per KYC norms.

Once KYC is verified and accounts are set up, brokers will provide login credentials, a unique client code (UCC) and details for your Demat account.

Demat account setup (NSDL/CDSL)

To open a Demat account:

1. Choose a DP (many brokers act as DPs or appoint one).
2. Complete the DP agreement which sets AMC (annual maintenance charges) and service terms.
3. Receive Demat account number and ISIN‑linked statements; set up nominee details for succession.
4. Understand AMC, transaction charges for debit/credit in Demat, and account freeze/transfer processes.

Demat accounts hold shares electronically — when you buy delivery shares, they are credited to your Demat; when you sell, they are debited.

Trading account setup and linking bank account

After the trading account is activated:

• Link your bank account to allow funds transfer and settlements; many brokers support UPI mandates, net banking and IMPS/NEFT transfers.
• Enable order funding options such as margin trading facility (if eligible) and set up payment authorizations for IPO applications (ASBA) or UPI mandates.
• Advanced traders may request API access for algorithmic trading (subject to broker approval and compliance).

Always check the broker’s settlement cutoffs, banking partners, and any pre‑funding requirements for large orders.

Placing trades — types of orders and execution

Order types (market, limit, stop‑loss, IOC/GTC)

• Market order: executes immediately at current market price; use when you prioritize speed of execution over exact price.
• Limit order: executes only at your specified price (or better); useful to control entry/exit price but may not fill if market moves away.
• Stop‑loss order: triggers a market/limit order when a specified price (stop price) is reached; used to limit downside.
• Immediate or Cancel (IOC): executes immediately for available quantity and cancels the remainder.
• Good Till Cancelled (GTC) or day orders: GTC persists until cancelled (availability varies); day orders expire at market close.

Understanding order types helps manage execution risk and slippage.

Product types (delivery, intraday, F&O, NRIs)

• Delivery (cash and carry): buy shares and hold them in Demat for days to years; settlement follows normal settlement cycle.
• Intraday: buy and sell within the same trading day; positions must be squared off before market close; brokers offer higher leverage for intraday which increases risk.
• F&O (futures & options): derivative contracts based on underlying equities or indices; require separate approvals, higher margin and are subject to expiry cycles.
• NRIs: non‑resident Indians buy Indian equities through designated account structures (FEMA and RBI regulations apply). See Special considerations — NRIs.

Order routing and execution venues

Orders placed through your broker are routed to exchange matching engines (NSE/BSE). Execution speed and routing depend on broker infrastructure and co‑location services. Market liquidity, order size and order type influence fill probability and execution price.

Settlement and post‑trade processes

India has moved toward faster settlement cycles for equities. In 2023, the move to T+1 for many stocks reduced counterparty and settlement risk. After trade execution:

• Trade confirmation: you receive a contract note from your broker detailing executed trades, prices, brokerage and charges.
• Settlement cycle: for delivery trades, the stock is credited to your Demat account and funds are debited/credited per the T+1/T+2 norms applicable to the instrument.
• Clearing & settlement: clearing corporations manage novation and guarantee of trades; depositories credit or debit holdings.

Always reconcile contract notes, Demat statements and bank statements with executed trades. Raise discrepancies with your broker promptly.

Buying in the primary market (IPOs)

Applying for IPOs via ASBA / UPI

When a company launches an IPO, retail investors can apply through ASBA (Application Supported by Blocked Amount) which blocks funds in the applicant’s bank account without debiting until allotment. Many platforms have integrated UPI application flows where UPI mandates are used for blocking funds and quicker refunds.

Steps to apply:

• Ensure your Demat and trading accounts are active and linked to a bank account that supports ASBA or UPI mandates.
• Use your broker’s IPO application portal, select the lot size and price band (or apply at cut‑off), and submit the application.
• On allotment, if you receive shares, funds are debited and shares are credited to your Demat; if not allotted, the block is released/refunded per the bank/UPI timeline.

Allotment, listing and listing day mechanics

• Allotment is decided through the registrar and communicated to exchanges and your broker; allotment status appears in your Demat account or broker portal.
• If allotment is not received, blocked funds are released or refunded to your bank account.
• On listing day, shares start trading on exchange; listing volatility can be significant — exercise caution when deciding to buy or sell on listing day.

Fees, charges and taxes

Transaction charges and brokerage

Brokers charge brokerage which may be a flat fee per trade or a percentage of trade value. Additional charges include:

• Depository Participant (DP) charges for Demat transactions
• Annual Maintenance Charges (AMC) for Demat accounts
• Exchange transaction charges and clearing fees (passed through by brokers)
• Platform fees, call & trade fees (if applicable)

Compare total cost per trade (including hidden fees) when selecting a broker. Low brokerage can be offset by poor execution or unreliable platforms.

Statutory levies

Common statutory levies on equity trades include:

• Securities Transaction Tax (STT) — applied on delivery sales and certain buy/sell in derivatives per prevailing rates
• Stamp duty — varies by state and transaction type
• SEBI turnover-related fees and exchange fees — small per‑trade charges
• GST — applied on brokerage and other taxable services

Brokers typically show a detailed breakup of these charges in the contract note.

Capital gains tax and reporting

Tax treatment for equity capital gains in India:

• Short‑term capital gains (STCG): gains on sale of listed equity held for ≤12 months are typically taxed at 15% (subject to conditions and prevailing law).
• Long‑term capital gains (LTCG): gains on sale of listed equity held for >12 months are taxed if aggregate gains exceed specified exemption limits; excess taxed at 10% without indexation (per current rules). Rules change over time — check the latest Income Tax Department guidance.

Investors must report capital gains in their income tax returns. Brokers issue consolidated tax reports to assist filings. NRIs and foreign investors have different tax withholding and treaty rules.

Risk management and order safeguards

Using stop‑loss and position sizing

Practical risk controls:

• Position sizing: limit exposure per stock to a percentage of portfolio value to avoid concentration risk.
• Stop‑loss orders: define exit points to limit downside, but be mindful of market gaps or volatility where stop orders may execute at worse prices.
• Diversification: spread investments across sectors or instruments to reduce idiosyncratic risk.

Margin, leverage and associated risks

Margin trading facilities and intraday leverage amplify returns and losses. Key risks include:

• Margin calls and liquidation: if your account equity falls below maintenance margin, positions can be auto‑squared by the broker.
• Higher transaction frequency: leveraged intraday trading raises costs and the chance of rapid losses.
• Regulatory changes: margin requirements and leverage limits can change, affecting strategy viability.

Use leverage cautiously and understand the broker’s margining and square‑off policies.

Investment strategies for retail investors

Long‑term investing vs trading

• Long‑term investing (buy‑and‑hold): focuses on fundamentals such as company earnings, management quality and sector prospects. Suits investors with longer time horizons and lower turnover costs.
• Trading (short‑term): relies on technical analysis, momentum and short‑term news catalysts. Trading often requires active monitoring, discipline and risk controls.

Choose an approach that matches your time availability, risk tolerance and tax implications.

Approaches: SIP/stock SIP, value, growth, index investing

• SIP in equities (systematic investment in mutual funds) is a common approach for disciplined investing. Some brokers offer stock SIPs (periodic purchases of specified stocks) though funding and operational details vary.
• Value investing: seeks undervalued companies with margin of safety.
• Growth investing: focuses on companies with high earnings growth potential.
• Index investing: ETFs and index funds offer broad market exposure and lower fees; suitable for passive investors seeking market returns.

Whichever approach you choose, ensure proper diversification and periodic rebalancing.

Special considerations

NRIs and foreign investors

NRIs investing in Indian equities must follow FEMA and RBI guidelines. Typical account types and steps:

• Open a Portfolio Investment Scheme (PIS) enabled account with an authorised bank for repatriation.
• Use NRE (repatriable) or NRO (non‑repatriable) accounts as applicable.
• Complete additional KYC and submit required NRI documentation.

Tax withholding, treaty benefits and repatriation rules differ for NRIs; consult tax advisors or bank guidance.

Senior citizens, minors, and corporate accounts

• Senior citizens: account opening and KYC are similar; consider nominee and succession planning.
• Minors: accounts held by guardians (guardian‑administered Demat/trading accounts) with specified nomination arrangements.
• Corporate accounts: require board resolutions, corporate KYC, and authorised signatory documentation.

Power of attorney (PoA) is sometimes used to authorise broker actions (e.g., pledge, off‑market transfers) — review PoA scope carefully before signing.

Algorithmic and API trading

Algorithmic trading requires broker approvals, API keys, and compliance with exchange and broker rules. Retail algorithmic traders must ensure:

• Proper risk limits and backtesting
• Order throttling and circuit protection
• Regulatory disclosures and audit logs

Many modern brokers provide APIs for order placement and market data; get formal approval and understand usage costs.

Choosing trading platforms and tools

Platform selection criteria:

• Reliability and uptime: platform outages directly impact order execution.
• Latency: faster platforms reduce slippage for active traders.
• Charting and market data: robust charting tools, indicators and historical data help strategy development.
• Research and news feeds: integrated research can assist decision making.
• Simulators/paper trading: test strategies in a risk‑free environment.
• APIs for automation: if you plan algo trading, ensure compliant API access.

Bitget provides an integrated trading experience and security features suitable for both new and advanced users. For custody of digital assets or cross‑product workflows, Bitget Wallet is recommended within Bitget’s ecosystem.

Investor protection, dispute resolution and best practices

Complaints escalation path

If an issue arises:

1. Contact your broker’s customer support and keep written records (ticket numbers, emails).
2. If unresolved, escalate to the exchange grievance cell (NSE/BSE) with the contract notes and supporting documents.
3. File a complaint via SEBI’s SCORES portal if the exchange route does not resolve the matter.
4. Consider the Ombudsman scheme or legal remedies for unresolved or complex disputes.

Document dates, confirmations and communications at every step.

Fraud prevention and cybersecurity

Protect your accounts and credentials:

• Use strong, unique passwords and enable two‑factor authentication (2FA) on trading platforms and email.
• Beware of phishing: verify official broker communications, and do not share OTPs or login credentials with anyone.
• Regularly review account statements, margin calls and unusual transactions.
• Keep your device OS and trading apps up to date.

If you suspect fraud, immediately contact your broker, block credentials, and report to exchange grievance cells and law enforcement as required.

Common pitfalls and frequently asked questions

Common beginner mistakes:

• Overtrading: frequent trades increase costs and reduce net returns.
• Ignoring fees: small fees add up; check total cost per trade.
• Inadequate KYC/documentation: delays in account activation can cause missed investment opportunities.
• Trading without plan: lack of entry/exit rules and risk controls often causes losses.

FAQs

• Minimum investment: there is no universal minimum — you can start with small sums via a broker that supports fractional purchases or low lot sizes. For direct equity, the minimum is typically the value of one share.
• Intraday vs delivery: delivery allows holding shares post‑settlement; intraday requires squaring off same day and often uses higher leverage.
• Account freeze: Demat/trading accounts can be frozen for KYC issues, legal orders or non‑payment of dues — resolve issues with your broker and DP.
• Transfer of holdings: you can transfer holdings across DPs via off‑market transfer forms (subject to rules and charges).

Glossary

• Demat: electronic account that holds securities in digital form.
• DP (Depository Participant): agent of NSDL/CDSL that maintains Demat accounts.
• PAN: Permanent Account Number used for tax and identity.
• ASBA: Application Supported by Blocked Amount — IPO application mechanism that blocks funds in bank account until allotment.
• STT: Securities Transaction Tax — tax on certain securities transactions.
• Limit order: an order to buy/sell at a specified price or better.
• Market order: an order to buy/sell at current market price.
• NSDL/CDSL: central depositories for electronic securities in India.
• UPI: Unified Payments Interface — real‑time payment system often used for IPOs and funds transfer.

References and further reading

Sources to consult for authoritative information and updates:

• SEBI official communications and circulars (regulatory updates, investor protections)
• NSE India investor education and product pages (trading rules, settlement updates)
• BSE investor resources (listing and market structure)
• Broker onboarding and how‑to guides from major regulated brokers (for practical steps on account opening and trading)
• Income Tax Department guidance for capital gains rules and tax filing

Note: the above references are generic descriptions; always verify the latest circulars and tax rules before acting.

Practical checklist: ready to buy

1. PAN and KYC completed.
2. Demat and trading accounts active and linked to bank account.
3. Knowledge of order types and settlement timings.
4. Understand total fees (brokerage + statutory levies + DP charges).
5. Risk management rules (position size, stop‑loss) defined.
6. Testing on paper or small trades before scaling.

Using Bitget and Bitget Wallet as part of your workflow

Bitget can serve as your trading platform for execution and portfolio tracking. Bitget Wallet is recommended for secure custody and cross‑product convenience within Bitget’s ecosystem. When choosing Bitget or any platform, confirm:

• SEBI registration status for broking activities (if applicable to on‑exchange equity trading) or compliance of third‑party integrations.
• Security features such as 2FA, device management and withdrawal whitelists.
• Customer support and dispute escalation mechanisms.

For investors seeking a modern interface, combined custody and trading workflows, and institutional‑grade security, Bitget and Bitget Wallet are suitable options to consider alongside traditional Demat/trading arrangements.

Further steps and learning

• Review broker contract notes and AMC schedules before committing funds.
• Read SEBI investor education material and NSE/BSE guides for process clarity.
• Consider paper trading or small pilot allocations to validate your strategy and the broker’s execution.

更多实用建议：立即检查您的PAN和KYC状态，比较至少两家平台的总交易成本与服务，并用模拟交易验证交易流程。