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Income tax on share trading

raj (bussiness) (38 Points)

23 August 2016

I am trading in eqiuty and i am intraday+short term+ long term trader. How can i calculate my tax liability! and what other income rax rules i should follow !

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5 Replies

Manjunath Rampure S (Student) (96 Points)
Replied 23 August 2016

It's better to consult a tax practitioner as you can't handle everything.

Still if you want to calculate it yourself,
1. Track your purchases and sales for short term holdings
2. No need to care about long term holdings as they're exempt.
3. Intra day trading is considered speculative and taxed separately. You may need to get your accounts audited.
4. Dividends exempt

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komal choudhary (none) (133 Points)
Replied 24 August 2016

Totally agree with mr. manjunath rampure sir.

As you are a trader hence ur intra day trading is considered as speculative income and will be taxable as business income, as per the guidenece note of ICAI ,"turnover" is "Net" of all postive and negative incomes from various transaction and not total of all Sales transaction. So, if your net income doesn't exceed Rs.1 Crore, you are not liable to tax audit.

S S Dahale ( Agri and business) (439 Points)
Replied 27 August 2016

I have a confusion , as mentioned above intra day trading ( with minimum margin) is termed as speculative business income on the other hand trading in F & O ( with same minimum margin ) is NOT TERMED as speculative business income , what is real scenario , as far as SPECULATIVE BUSINESS INCOME is concerned

Manjunath Rampure S (Student) (96 Points)
Replied 27 August 2016

Dear Dahale,

F&O market is a place to safeguard yourself from market risks. Though there is no actual delivery of goods, idea is that you'll square off your position and buy the commodity in open market. So, they are excluded from considering as speculative even if there is no actual delivery of goods.

But in case of shares, the things are different.

Hope it helps

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