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Introduction With the growing participation of salaried individuals in the stock market, it is common to earn income not only from salary but also from shares, mutual funds, dividends, and trading activities. However, many taxpayers are confused about taxability, applicable sections, and ITR report
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A salaried individual can earn income from the stock market through capital gains from shares or mutual funds, dividend income, intraday trading income, and F&O (derivatives) trading income.
Short-term capital gains (STCG) on equity shares held for up to 12 months are taxed at a rate of 15%, plus cess, under Section 111A of the Income Tax Act.
Yes, dividend income is taxable under 'Income from Other Sources' and is taxed at normal slab rates. TDS at 10% is deducted if the dividend exceeds Rs 5,000.
Intraday trading income is treated as speculative business income and is taxed at slab rates. Losses from intraday trading can be carried forward for 4 years.
No, deductions under Chapter VI-A (like 80C, 80D) can be claimed against salary and dividend income, but not against short-term capital gains (STCG) under Section 111A or long-term capital gains (LTCG) under Section 112A.
If a salaried individual has both salary and trading income, they should file ITR-3.
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