November 11, 2025
4 mins read
If you trade in the stock market, every executed order comes with paperwork. That paperwork is called a contract note.
It’s a legal document issued by your broker after each trade. It lists out the important details — price, quantity, order type, brokerage, taxes — basically everything you need to know about what really happened.
In India, SEBI makes it mandatory for brokers to issue contract notes for equities, commodities, and derivatives. For you, it’s proof that your broker has done their job correctly and transparently.
The contract note is produced after the order is executed, but it does not come to you automatically; there is a clear progression involved. The following comes to mind:
Execution of the trade – Your buy or sell order has been done at the exchange by the broker. The details are matched and recorded against your account.
Contract note generation – Your broker produces a note by the end of the trading day confirming the details of the execution, including time, price, and quantity.
Details of the transaction included – The note will include an order number, trade ID number, name of the security, brokerage to be paid, taxes, taxes, and net receivable/payable.
Copy of the note – Most brokers will send you a PDF of the note via e-mail, although you may need to request a paper copy if you would like one.
Verification and recordkeeping – Your responsibility is to verify the details of the note and keep the note in a safe place for taxes or in case of disputes.
Before you dive into trading deeper, you need to understand why this document matters so much. Here are the key reasons:
It acts as your proof. By going through your contract note, you can confirm that your broker placed and executed trades exactly as you wanted.
It’s also your financial record. For tax filing, audits, or capital gains calculation, your contract note becomes the reference that helps you stay compliant and stress-free.
When you look at a contract note, you’ll see a lot of numbers and codes. But once you break it down, here’s what it really contains:
The front section lists order details, trade IDs, price, quantity, and security names. That’s your first level of clarity.
The back-end lists charges — brokerage, STT, stamp duty, GST — so you know exactly how much went to fees versus investment.
If you trade equities, your contract note contains some very specific pieces of information. It indicates the following:
Trade identifier - Each order is assigned a unique number. If you ever needed to, you could identify every trade.
Security information - The company name, price and number of shares are clearly displayed so you know what you traded.
Brokerage and taxes - Brokerage, STT and service taxes are clearly displayed separately for your knowledge.
Settlement information - The net amount to be paid or received is noted so you know what the cash flow would be at final settlement.
For derivatives like futures and options, the contract note looks slightly different. These are the parts you should check:
Contract specifications – Details like expiry dates, contract codes, and strike prices are included.
Trade details – The number of contracts, whether you bought or sold, and the trade value are all listed.
Margin obligations – Since derivatives need margins, your obligations are shown here.
Brokerage and levies – Just like equities, all charges and taxes are broken down clearly.
This section is about what you owe or what you receive after trades are settled. It usually contains:
Pay-in amount – How much you need to pay if you’ve purchased securities.
Pay-out amount – How much you’ll receive if you’ve sold securities.
Settlement date – The exact date when shares or money will move into your account.
Most contract notes carry an annexure. This usually lists disclaimers, trading terms, and regulatory notes. You might be tempted to skip it, but it can protect you in disputes.
This is where things get super transparent. Each order is broken down with its own brokerage charge.
You can see exactly what fee you paid per order instead of only a lump sum. For you, it’s like getting an itemised bill rather than just the final total.
By now, you’ve probably realised this is not just a boring PDF — it’s your safety net. Without it, you’d be trading blind.
It ensures your broker executed your orders as per your instructions and shows you every single cost that ate into your returns.
During tax filing, you’ll lean on these notes to calculate capital gains. And if a dispute ever arises, your contract note becomes legal proof. That’s why SEBI makes them mandatory — they protect you and keep brokers accountable.
For you, regularly checking your contract notes helps you catch mistakes early. It also builds trust in your trading process because everything is documented.
A contract note is one of those documents you should never ignore. It shows your trades, your costs, and your settlement details in black and white.
If you get into the habit of checking them, you’ll spot errors, avoid disputes, and feel more in control of your investments.
Keep them safe, whether as digital PDFs or printed copies. Always verify your PAN, client ID, and trade details. Doing this not only protects your money but also makes you a more disciplined trader.
At the end of the day, a contract note is more than compliance. For you, it’s peace of mind — knowing your trades are recorded, verified, and protected.
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A contract note is an official document issued by a stockbroker confirming the details of your trades on a specific day. It includes the security name, order type, quantity, price, and all applicable charges. It acts as a legal record and is mandatory under SEBI guidelines for every executed trade.
A contract note ensures transparency in your trading activity. It documents each transaction with a timestamp and charge breakdown, helping you verify trade execution and costs. It also serves as legal evidence and supports tax filing, making it an essential document for compliance and record-keeping in stock trading.
Start by checking the trade date, order ID, security name, quantity, and rate. Review the brokerage, GST, STT, and stamp duty charges. Ensure your personal details are accurate and match your demat account. Understanding each section will help you confirm if trades were executed as instructed.
A contract note includes client code, PAN, order number, trade ID, security name, quantity, trade price, time of execution, brokerage charges, taxes, and the net amount. It also contains the broker’s seal, digital signature, and settlement information as per SEBI’s prescribed format.
Yes, a contract note is legally binding in India. It serves as valid proof of a trade executed through a registered broker. SEBI mandates its issuance, and it can be presented in case of disputes or during tax audits. Its legal status ensures both transparency and protection for the investor.
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