Income Tax on Stock Market Trading#
Types of Trading#
Intraday Trading#
- Buy and sell same day
- Speculative business income
- Taxed as per slab rate
F&O Trading#
- Futures and Options
- Non-speculative business income
- Taxed as business income
Delivery-Based Trading#
- Shares held for days/months
- Capital gains treatment
Tax Treatment#
Short-Term Capital Gains#
- Holding < 12 months (equity)
- 15% tax on profit
- STT must be paid
Long-Term Capital Gains#
- Holding > 12 months
- 10% on gains above ₹1 lakh
- STT must be paid
Loss Set-off#
- F&O loss set off against business
- Can carry forward 4 years
- Cannot set off against salary
Conclusion#
Know your trading type for correct tax treatment.