Income Tax On Equity Trading

[deepak5442]

How much income tax one has to pay on equity trading? suppose i have bought share of 100000Rs and sold it on 150000Rs?

 

[ranj_2k]

If you sell equity within one year of purchase you will have to pay 10% on gain i.e. Rs.5,000. If you sell after one year your total gain is tax free.

 

[sachein]

In internet search, it is mentioned that equity sell within one year of purchase will be taxed at 15% on profit. I request ranj_2k to verify the figure of 10%.
Also, I have a query regarding inclusion of loss in equity trading in total earning. There is mention of adjustment against loss. But it is not clear if loss in equity is adjustable. Anybody well versed about it can share his views and knowledge.
Thanks

 

[manojborle]

https://cleartax.in/s/set-off-carry-forward-capital-losses

Surf through this site and your queries should be answered.

 

[5paisa]

Taxation on trading of securities vary. With several market reforms introduced, here are a things that you need to check out.
For short term gains achieved through equity trading, tax of 15% is levied. In addition to this there is STT.
With GST coming in picture, the taxation structure has changed. Take a look of the impact of GST on security taxation https://www.5paisa.com/knowledge-ce...your-stock-market-trading?utm_source=traderji

 

[5paisa]

Here is detailed explanation of income tax on share trading
Income Tax on share trading –
Income tax on share trading depends on whether you are showing it as “Capital gain” or “Business Income”.

Capital gain: If you are trading in stock market as an investor (mostly involved in delivery based trading), the gains from trading can be classified as:

• Long term capital gain: – If equity shares are sold after 12 months holding then such gain is subject to tax exemption. However, the security must be traded an Indian stock exchange on which STT has been paid. Exemption on long-term capital gain tax is not applicable if the shares are sold on the exchange outside India. Long term capital loss from equity shares is a dead loss – it can neither be adjusted nor carried forward.

• Short term capital gain: If equity shares are sold within 12 months from the date of purchase, then the short term capital gain tax of 15% is applicable irrespective of the personal tax slab (10%, 20% etc). If investor’s other income excluding short-term capital gain is less than basic exemption limit then he can take benefit of such shortfall in basic exemption limit. Any short-term capital loss from equity trading can be set off against any short-term capital gains. The important points to note here is that long-term capital gain arising on shares sold directly to a friend without routing it through Indian stock exchange are not exempted from tax as STT is not paid on such shares.

Business income: If you are trading in the stock market frequently (mostly non-delivery trade), returns from it can be classified as follows:

• Speculative Business income: Profit from intraday trading is categorized under speculative business income. Tax treatment is similar to your Business income tax. It is taxed as per the tax slab you fall in while losses can be offset only against speculative gains.
• Non-speculative Business income: Income from trading futures & options on recognized exchanges (equity, commodity, & currency) is categorized under non-speculative business income. Tax on share trading in such cases is similar to your business income tax. The profits on F/O trading is taxed as per the tax slab you fall in whereas losses on such F/O trading can be set off against business profit.

So, the important point is whether to classify income from share trading under “capital gain” or “business income”. In general, if you are mostly involved in delivery based trading with very few non-delivery based trading then it is better to classify the income under “Capital Gain” head. (Consult with your chartered accountant before finalizing the IT return)

Taxation on Dividend

A company shares a part of its profit with the shareholders in the form of dividend. Dividend in the hand of investor is tax-free. The company has already paid Dividend Distribution Tax. So effectively 15% tax has been already paid by the company on the investor’s behalf. Therefore such dividend is tax-free in the hands of the investor.

 

[traderniftybull]

Is LTCG rule that applies to shares, also applies to fno derivatives.
Suppose I hold a derivative for more than 12 months, will the earnings thereon, be tax free

 

[Stock Market Institute]

Flat rate of 15 percent if the trade is less than 12 months

 

[John Davis]

If you sell the equity by holding it less than 12 months you will have to pay 15% flat on the profit

 

[NetFreak]

There are many ways to gain money online, but for me the best way would be to trade with Forex, though it is quite risky, but it is quite rewarding too.