Taxes with respect to different kinds of shares transactions

[mihirp]

Hello,

I have certain questions regarding taxation on shares transactions. I am a regular trader; i.e. buying and selling shares on same or different day, buying and selling futures and options on either same or different day.

I would like to learn how a transaction is determined to be long term capital gain, short term capital gain, speculation profit, or trading profit?

I am presenting various scenarios and I would like to learn about the tax implications on the same.

The scenarios are:

1. If I buy delivery based shares and sell them after 5 days.

2. If I buy delivery based shares and sell them after 2 months.

3. If I buy delivery based shares and sell them after 1 year.

4. If I buy shares and sell them on the same day.

5. I buy future lot and sell on the same or later date.

6. I buy nifty option [call or put] and sell on same day or later date.


Please let me know how you would classify the tax segment for each point above.

Another question is how do I judge whether the shares transactions done by me are business or investments. Since I do share trading on daily basis, including delivery based, futures, and options , would all my transactions be deemed as business transactions and be levied a tax of 33%?

Thanks and Looking forward to responses.

 

[Sandino]

I am replying to your questions as per what I know. I hope other members will step in to put forward with more informed views.

1. If I buy delivery based shares and sell them after 5 days.
Short term capital gain if you have enough capital to take deivery of your trade. If you are trading on using your brokers exposure, then it will be treated as business income.

2. If I buy delivery based shares and sell them after 2 months.
Short term capital gain as no broker will allow you to carry debit position for such a long period.


3. If I buy delivery based shares and sell them after 1 year.
Short term capital gain as no broker will allow you to carry debit position for such a long period.


4. If I buy shares and sell them on the same day.
It will be treated as business income.


5. I buy future lot and sell on the same or later date.
It will be treated as business income.

6. I buy nifty option [call or put] and sell on same day or later date.
It will be treated as business income.

I repeat, this are my perception only.

Sandino

 

[vinay_talks]

Just wanted to add If you sell a stock after 1 year of purchase then the entire profit is treated as Long term capital gains and is exempted from tax.

 

[Navj29]

I am a 82% physically disable person. My only source of income is online share trading. Can i receive tax benefits on short term capital gain? If yes, how?

 

[basudeo]

D/members,

Suppose I purchased 100 tisco shares @550/- a week ago and sell them @580/- now. Latter today if I purchase 100 shares @570/- and hold for another week. Can both the transactions be interpreted in short term capital gain catagory.

Thanks.

basudeo

 

[vinay_talks]

Yes, Anything transaction within a year comes under Short term capital gains tax and this includes day trading also.