Long Stock Options Contracts:

i) In-The-Money (ITM)
Settlement MethodPhysically settled.
STT (Securities Transaction Tax)Charged on exercised contracts at a rate of 0.125% of the intrinsic value (how much in-the-money the option is), i.e., intrinsic value of option multiplied by quantity of option position.
BrokerageCharged @0.10% on both the buy and sell sides of the contract value.

ii) Out-of-The-Money (OTM):
OutcomeExpire worthlessly.
LossThe entire premium paid while buying the option will be lost.
BrokerageCharged only on the buy side.

Short Stock Options Contracts:

i) In-The-Money (ITM)
Settlement MethodPhysically settled.
STT (Securities Transaction Tax)Will be same as in buying or selling shares in cash segment.
BrokerageCharged @0.10% on both the buy and sell sides of the contract value.

ii) Out-of-The-Money (OTM):
OutcomeOption Expires worthless.
ProfitThe entire premium received while selling the option will be the profit.
BrokerageCharged only on the sell side.

Index Options:
Settlement MethodCash-settled.
If Bought:
ITM ContractsSTT is charged on exercised contracts at 0.125% of intrinsic value, and brokerage is charged on both sides.
OTM ContractsExpire worthlessly, and brokerage is charged only on the buy side.

If Shorted or Sold:
ITM ContractsSTTCharged only on the sell side when initiating the short.
STT Impact on ExpiryNone.

​What is Tradejini's policy on the physical settlement of equity derivatives on expiry?​

PremiumsReceived are kept by the trader, depending on the moneyness of the option contract.