10.14 Trading on MCX I: costs, tax and choosing the contract

Motivation

10.1–10.13 explained commodity prices. This section and the next treat an MCX contract as something you trade: what a round trip costs, how the profit is taxed, which contract size fits the account, what margin the clearing corporation will demand and when, what happens at expiry, and why the evening session and the overnight gap matter more on MCX than on NSE. 10.10 lists the contracts; read it first.

A note on sources (6 Nov 2026) The websites of MCX (mcxindia.com) and its clearing corporation MCXCCL (mcxccl.com) refused automated fetching while this section was written, as did incometaxindia.gov.in. Facts are therefore marked:

[V] read in a primary document: the Finance Act, 2020 as published in the Gazette of India (27 Mar 2020), SEBI circulars on sebi.gov.in, and an NCDEX member compliance note that reproduces the Commodities Transaction Tax rules (30 Sep 2025);
[S] secondary only: exchange-circular summaries, financial press and tax publications.

Every [S] item, and every MCX parameter, must be checked against the current MCX circular before you trade.

10.14.1The cost stack#

An MCX futures trade pays six items. Rates as of 6 Nov 2026:

Item	Rate	Paid on	Source
Commodities Transaction Tax (CTT), futures	0.01%	sell side, at the traded price	Finance Act, 2013, Chapter VII, s.117, table substituted by the Finance Act, 2020, s.149, from 1 Apr 2020 [V]
CTT, options on commodity futures	0.05% of premium on the sale of an option; 0.0001% of the settlement price, paid by the purchaser, on exercise		same, rows 3 and 5; value rules in s.118 as amended by s.150 [V]
MCX transaction charge	₹2.10 per lakh of turnover (futures); ₹41.80 per lakh of premium (options); flat, not slab-based	each side	MCX circular MCX/F&A/631/2024 of 24 Sep 2024, from 1 Oct 2024, following SEBI's "true to label" circular SEBI/HO/MRD/TPD-1/P/CIR/2024/92 of 1 Jul 2024 [S for the MCX rates; V for the SEBI circular's number and title]
SEBI turnover fee	₹10 per crore (non-agricultural); ₹1 per crore (agricultural)	each side	[S]; the agricultural reduction is referred to in SEBI circular SEBI/HO/CDMRD/DMP/CIR/P/2019/40 of 20 Mar 2019 [V]
Stamp duty	0.002% (futures), 0.003% (options, on premium)	buy side	Indian Stamp Act, 1899, Schedule I, as amended by the Finance Act, 2019, from 1 Jul 2020 [S]
GST	18%	on brokerage + exchange charge + SEBI fee	[S]

CTT applies only to non-agricultural commodity derivatives. A list of agricultural commodities is exempt; options in goods on those commodities fall outside "taxable commodities transactions" (s.116(7))¹. No change to the CTT rates by the Finance Act, 2025 or 2026 was found; the 2026 Act raised STT on equity derivatives but, according to press commentary, left CTT alone². The Act's text could not be read; confirm the rates on the contract note of your first trade.

Round-trip cost of a futures trade With brokerage $b$ per order, buy value $B$ , sell value $S$ , exchange rate $x_e$ , SEBI rate $x_s$ , stamp $x_d$ and CTT $x_c$ :

C = 2b + (x_e + x_s)(B + S) + x_d B + x_c S + 0.18\,\big[2b + (x_e + x_s)(B + S)\big]. \tag{10.28}

Worked example 10.14.1one lot of crude, with a stop

MCX crude is cash-settled on NYMEX WTI converted at the RBI reference rate (10.10). So WTI times USDINR is a close proxy for the MCX price. MCX's own price history is not freely downloadable, so the proxy is used here.

On Friday 30 Oct 2026 the proxy was $104.12 \times 95.1524 = \text{₹}9{,}907$ /bbl (Yahoo closes for CL=F and INR=X).
A trader buys one CRUDEOIL lot (100 bbl, notional ₹9,90,700) with a stop at ₹9,600.
On Monday 2 Nov, WTI opened at $102.39 and fell to a low of $95.15. The proxy open was about ₹9,726, so the stop held at the open and was triggered during the session. Assume a fill at ₹9,600; a fast market can fill a stop-market order lower.
Gross loss: $307 \times 100 = \text{₹}30{,}700$ .
Costs by (10.28) with $b = \text{₹}20$ : brokerage ₹40.00, MCX charge ₹40.96, SEBI ₹1.95, stamp ₹19.81, CTT ₹96.00, GST ₹14.92, total ₹213.65, or 2.2 bp of the notional.
The same notional in an NSE equity future would pay ₹480 of STT alone (0.05%), ₹591 in all. On the tax line, MCX futures are cheaper to trade than equity futures by a factor of five.
Net loss ₹30,913.65.

Is one lot right? For a ₹10 lakh account risking 1% (₹10,000) a trade, no. The planned risk of ₹30,700 is 3.1% of the account. CRUDEOILM (10 bbl, still listed after its relaunch at that size in March 2023 [S]) risks ₹3,070 a lot, so three lots fit (₹9,210 of risk, costs ₹63.85 a lot). The minimum initial margin on crude was 30% of contract value from 18 May 2026 (MCX/MCXCCL circular 283/2026 of 14 May 2026 [S]), so three mini lots tie up about ₹89,000 of margin: 9% of the account for 9% of risk budget. Size from the stop (M03 (3.23)); check that the margin fits; never size from the margin.

10.14.2Tax#

Commodity derivatives

Classification. A trade in commodity derivatives on a recognised exchange that is chargeable to CTT is not a speculative transaction. Under the Income-tax Act, 1961 this was the first proviso to s.43(5), clause (e); agricultural commodity derivatives qualify without CTT from 1 Apr 2019. Under the Income-tax Act, 2025 (from tax year 2026-27), s.66 excludes a "specified derivative transaction", defined to include these contracts. The Finance Act, 2026 defined "commodity derivative" and "commodities transaction tax" by reference to Chapter VII of the Finance Act, 2013 [S for all: tax publications' readings of the Acts].
Treatment. The profit is therefore non-speculative business income, taxed exactly like equity F&O (M00 · 0.7): at the slab rate; losses can be set off against any income except salary and carried forward 8 years; ITR-3; turnover for the tax-audit test computed as for F&O.
CTT is deductible. It is an expense in computing business income (old s.36(1)(xvi); the new-Act section was not verified) [S]. It is not a credit against tax.
Intraday commodity trades are not speculative. Unlike intraday equity, a commodity futures trade opened and closed the same day stays non-speculative, because the clause covers any CTT-chargeable exchange trade [S; this follows from the clause as read, but confirm with a chartered accountant].

Gold and silver held another way (transfers on or after 23 Jul 2024; Finance (No. 2) Act, 2024, as reported [S]):

Holding	Long-term after	Long-term rate	Short-term
Listed gold or silver ETF units	more than 12 months	12.5%, no indexation	slab rate
Physical gold or silver, unlisted gold funds	more than 24 months	12.5%, no indexation	slab rate
Sovereign Gold Bonds	sale on the exchange after 12 months: 12.5%; redemption by the RBI at maturity: not a transfer (old s.47(viic))		slab rate

Gold and silver ETFs fall outside the narrowed definition of a "specified mutual fund" (funds with more than 65% in debt), whose gains are taxed at slab rates. Sources differ on whether that change took effect on 1 Apr 2025 or later. Reports also say that the Finance Act, 2026 limited the SGB redemption exemption to original subscribers holding to maturity; sources disagree on whether it applies to bonds already held [S for both]. Verify all three rows on incometaxindia.gov.in before acting. M15 · 15.8.6 discusses a gold ETF trade under these rules.

The tax difference matters for strategy. A gold position held for two years through MCX futures pays slab-rate tax on every rolled contract's profit, every year. The same exposure through an ETF pays 12.5% once, at the end. M00 · 0.7 has the slab table.

10.14.3Which contract?#

The contract size sets the smallest risk you can take. With $\pi$ the rupees per tick of 10.10 and a stop $s$ ticks away, one lot risks $\pi s$ , and the 1% rule allows $\lfloor 0.01E/(\pi s)\rfloor$ lots.

Contract	Lot	Notional at an illustrative price	Risk per lot for a 3% stop
SILVER	30 kg	₹48,00,000 at ₹1,60,000/kg	₹1,44,000
SILVERM	5 kg	₹8,00,000	₹24,000
SILVERMIC	1 kg	₹1,60,000	₹4,800
GOLD	1 kg	₹1,41,44,800 at ₹1,41,448/10 g	₹4,24,344
GOLDM	100 g	₹14,14,480	₹42,434
CRUDEOIL	100 bbl	₹8,49,400 at ₹8,494/bbl	₹25,482
CRUDEOILM	10 bbl	₹84,940	₹2,548

Where the prices come from:

Silver, ₹1,60,000/kg: a round number for illustration near the duty-free parity of ₹1,57,167/kg on 6 Nov 2026 (COMEX $52.06/oz × 93.90 / 31.1034768 × 1,000). Duty, the local premium and carry come on top; read the actual MCX price.
Gold: the duty-paid parity on 6 Nov 2026, by (10.15) at 15% duty.
Crude: the 6 Nov proxy, WTI times USDINR ($90.46 × 93.90 = ₹8,494).

Lot sizes are from 10.10 and secondary specification summaries [S]. GOLDM, SILVERM and SILVERMIC are the contracts a ₹10 lakh account can size correctly.

Worked example 10.14.2silver for a ₹10 lakh account

At ₹1,60,000/kg with a 3% stop (₹4,800/kg), SILVER and SILVERM allow zero lots at 1% risk. SILVERMIC allows two (risk ₹9,600).
A two-lot round trip to the stop costs ₹101.01 by (10.28): brokerage ₹40, MCX charge ₹13.24, SEBI ₹0.63, stamp ₹6.40, CTT ₹31.04, GST ₹9.70. That is 1% of the risk.
At 1 kg a lot, brokerage is the largest item. A per-order fee that is trivial on a crude lot is 0.4% of the trade's risk here; compute it before choosing a micro contract over a mini one.