Why am I charged a penalty of more than 18% p.a. on a debit balance at FYERS?
At FYERS, we apply a penalty of 18% per annum (p.a.) on the debit balance in a client's trading account. This penalty is in place to encourage timely settlements and maintain the financial health of the trading ecosystem. Let's clarify how this penalty and the associated Goods and Services Tax (GST) are calculated.
Penalty Calculation:
- Determine the penalty based on the annual rate: For instance, if you have a debit balance of ₹1000 for one year, the penalty would be ₹180 (i.e., ₹1000*18%).
- Calculate the GST on the penalty: The GST is charged at 18% on the penalty amount. Using the above example, the GST would amount to ₹32.40 (18% of ₹180).
- Sum up the total: The total amount payable would be ₹212.40 (₹180 + ₹32.40).
Refund of Penalty:
It's essential to understand that the penalty is charged for the duration you had a debit balance in your trading account. Unfortunately, this penalty won't be refunded after you clear your debit balance. We advise maintaining a positive balance to avoid such penalties in the future.
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Will FYERS charge penalties for debit balances in trading accounts?
Yes, if your trading account with FYERS shows a debit (negative) balance exceeding ₹100, a penalty applies. Here's the breakdown: Penalty Rate: An annual rate of 18% or a daily rate of 0.05% applies on the debit amount. Accrual Method: The penalty ...