Amit had invested a major part of his savings in the stock market. However, he was confused about the tax treatment of the profit arising from equity investment. First you need to know that there is no tax exemption on direct equity investment.

Investment in ELSS mutual funds offer tax exemption under 80C. So, our entire focus is on the various tax that is applicable in the PROFIT from equity investment. In this article, we are focusing on applicable tax on share trading and how one can optimize it.

Suppose you have purchased a share at Rs and sold it at Rs To minimize capital gain tax one need to understand how such tax on share trading works:. If you are trading in the stock market frequently mostly non-delivery tradereturns from it can be classified as follows:. 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. Therefore such dividend is tax-free in the hands of the investor. Tax on share trading can be reduced considerably by following certain Tax saving methods —. The benefit is you can deduct your trading related expenses from the gain. So, instead of paying tax on 1 Lac your taxable income stands at only 56, This can be offset against only against short-term capital loss. At the same time you have stocks purchased within 1 year in your portfolio those are showing loss of Rs.

You are confident that over long run those stock will turn profitable.

In this process, you can continue holding the stock having good long-term prospects and also save tax. All income sources must be considered before classification of income from equity investment. Approach to your CA for an in-depth look at your overall financial statement before finalizing IT return. Thank you for such valuable information in such simple language…. Shows how much pain you take for your members. I am CA Final student and your member also and i found this article highly useful…well done.

Thanks a lot for for your valuable information about income tax for share trading. I started share trading since In that FY I made net loss about Rs. In this FY I do not make any profit right now. So I want to know…is it mandatory to make file of Income tax in such a situation. Income tax filing is required if your overall income exceeds basic exemption limit of 2. You can carry forward the previous loss to adjust with profits in the subsequent to save capital gain tax.

You have given an example of selling and entering again at a lower rate, but what happens if I buy a stock today at X and then sell everything and re-enter at a lower rate x after 3 months. After 1 year 2 months of X initial priceyou give an exit alert that the time is right to sell now, but then my holding period is less than 12 months so I have to pay Short Term Capital Gains tax.

If there is enough confidence that the exit time-frame will be more than years then it is OK, otherwise it is difficult to manage….

Tax optimization part and selling a stock based on fundamentals should be treated separately. The example mentioned in the above article is applicable if there is an unrealized loss from stocks holding less than 1 year. In such situation, investors can take advantage to reduce short-term capital gain tax. If he has no other income and capital gain is less than basic exemption limit currently 2.

It does not matter whether you are taking money out into bank account or not. Tax treatment would be same. Your articles are easy to understand, to the point and very relevant. Thank you for spreading your wisdom, we are lucky to have you in our lives.

Dear Sir, I am sayan basically from kolkata currenty working at syndicate bank, chennai. I want to start investing my saving to equities apart frm mutual fund investmnet which im alrdy holdingcould you guide me the min amount that i can start with my portfolio and after that monthly ll incrs the same as im 22now n working fr lst 2 years in audit and banking.

Emissions trading - Wikipedia

There is no such minimum amount to start investing in stock market. One can start with any amount. Gradually you can increase your investable amount as your confidence increase.

Thank you for your valuable information Here, I have a question, I am an NRI, since I am trading as resident, but the source of money is from my NRI account. I dont have any other income except my nri salary. I made lot of trade including intraday, so far the result of trading is a big loss. Now income tax dept looking the source of income. How can I resolve this subject. Your kind advice is highly appreciated Best Regards. I think you can update this article with the impact of Advance Tax on short term capital gains… as from this budget, individuals also have to pay advance taxes on extra income from FDs, short term capital gains… Otherwise they will be charged some penalty during final Tax filing.

I feel it is better to pay the tax from short term capital gains by the due dates only. Please share your views on this. Due Dates of payment of Advance Tax: That is not new inclusion, only modification is that there are now 4 installments earlier 3.

Thus, one has to pay advance tax on all taxable income as per the above schedule. Iam retired,with no other income age 58 yrs.

If your total income interest income and profit from shares less loss remains below 2. I had sold maximum numbers of equity shares held by me after a period of 12 months. But I did not maintain any record of the same.

A very few shares were sold within 12 months of purchase. Shall I require to pay income tax on the profit earned for those shares sold after a period of 12 months. Also wherefrom I shall get the the details of shares sold after a a period of 12 months and within 12 months of its holding. As per the income tax law, you must have to disclose the profit and pay applicable tax on it. You can collect your entire transactional data from your broker. I just want to know whether I have to pay income tax on the profit earned on selling equity shares after 12 months of its holding.

My father is a senior citizen. For last financial year, his earnings from bank FD was 1. He has carried forward STCL from shares worth Rs. Since he is below exemption limit, should he setoff from or should he carry forward for next year and simply reduce from 1. As the total income is below exemption limit so he can carry forward the loss for the next year. Always consult with CA before taking final decision.

Is there have any limit of brokerage?? You can contact with various brokerage house like zerodha,rksv etc and compare your current brokerage structure. As the profit is not more than 50k and there is no other taxable income, so you may skip filing the return. It is always better to consult with CA before taking the final decision.

I had been keeping the shares of a reputed co for the last 12 years. Last year an employee of a broking house coaxed me to do trading for which i was reluctant.

He started trading for me and in one and half months he sold out all the shares thus putting me to loss of about He only earned Rs. You need to show the loss in your IT return to carry forward it. My Friend investing in lot of shares. I generally file my own it return. Secondly long term captial gain even though it is not taxable do we need to show.

Generally, it will be ITR 2 but it depends on the other sources of income. Yes, one must have to show long-term capital gain although estrategia de forex rentable is not taxable.

I am a government employee. And would that profit will add in my what year did james ritty invented the cash register tax slab?

I purchased SBI Gold ETS during the year Relationship between cash and retained earnings worth of Rs.

Resulting a Capital Loss of Rs. During the yearI got a Short Term Capital Gain of Rs. Can I offset this Long Term Capital LOSS result on selling after one year of purchase from the Short Term Capital Gain of income of Financial Year of as the Long Term Capital LOSS and Short Term Capital GAIN are generated from the same financial year??? Kindly consult with your Chartered accountant. If your total income from all sources is less than 2.

A very good article indeed. I have some doubts regarding short term capital gain taxation. I earned profit of in short term trading. You need to take the help of a Chartered accountant. So the calculation will be as follows, ryt? Education cess would be applicable on the final tax amount. Kindly take help from any professional Chartered accountant for the detailed calculation. I invested only in delivery last year but the number of transactions i did with my 20 Lakh capital is Over all i made 6 lakhs profit stcg.

This will project the money i invested is a huge amount. How do i capture the money spending on purchasing research report, internet connection. Can i consider these amounts in cost of improvement? You need to show the both investment value Holding statement and the profit from it. Yes, one can deduct those expenses like internet connection, purchasing research report etc.

So, it is highly recommended to take help from any CA for the IT return. Thanks for providing the answer quickly. So i have to go with 2. I have income from salary and shares so which ITR I have to fill? STT is the Securities Transaction Tax which is different from the Short term day trading system afl gain tax.

You need to consult with any CA for the appropriate ITR form. Hi Thanks for the valuable information. I want to know 1 thing, I invested 2 lac rupees in share trading in sept and I lost after deducting profit of that share trading tax implications india till feb Now again I am starting the trading from August If you had mentioned about the loss in the tax return of FY then only you can adjust in the consecutive years.

I am showing Share trading as Business Income and shares held are reflected as Stock in Trade. Please let me know that i whether the Dividend received will be taxable and ii Profit on trading of Shares i. Dividend receivables within 10 Lacs are not taxable 2. Intraday profit is considered as speculative business income. I have done Transection of more then Rs.

Shoul I pay tax…? Contact with any Chartered accountant for the details. Now while filling tax which form should i select as i want to report my intra day loss and carry it forward 4 years is cary forward is allowedbut is there any clarrification on how work from home jobs in wilkes barre pa classify as a trader or an investor for intraday, is there any criteria with respect to the turnover.

ITR 2 or ITR 4 is required to fill if you want to carry forward the loss. You must require help from any Chartered accountant to file the return as ITR 2 and ITR 4 is little complicated. Can I claim mylossesand it possible to get exemption while filing returnsPlease reply me. You can adjust the share trading tax implications india loss only if you had mentioned the loss amount during the tax return for FY13, FY14 etc.

Also note, we are not Chartered accountant. Kindly provide your entire profit and loss statement to the CA to finalize the return. I work in a hotel and having an annual salary of 1. I started to deal in online share market as well and have day trading minimum account balance Rs.

Do I need to pay tax over this profit of Rs. If the total salary and profit from investment remain below 2. I received shares worth Rs. Now I want to sell these shares after a period of more then 1 year. Will there be any tax liability on my part.

If you sell after one year then there is no tax liability. There might be some additional compliances required if you inherit those shares. Contact with any CA for the details. I am salaried and my salary is 3. I have done Intraday trading and a loss of 50 thousand RS in this Year. Is it mandatory to declare the loss or can I only show my income as from gta san andreas cheats money. Yes, it is mandatory to declare all kind of transactions with profit or loss.

You can also hide it but there are little chances of enquiry from the tax department. I have same case with me and pls let me know what happen if not show this loss in ITR and stock market bubbles type of enquiry and penalty can be happen.

It may not attract any penalty. My loss in STCG loss In Speculation Turnover more than 1 crore in delivery based transaction And no other income Whether require ITR and audit, if income below taxable limit. ITR is the must.

As your turnover also exceeds 1 crore then audit is also required. Consult with any CA for the details. How is the tax calculated if i buy the same share in parts?

For example, if i have bought 50 shares of Infosys for the 1st time in July and 2nd time i bought shares in December So, if i sell all the shares in Septemberwill it be tax exempt because of more than 12 months holding? I have got bonus shares in the month of December From shares it came to shares. And the same was sold typical stock broker commission May powers of authorised dealers in foreign exchange And reinvested the money in other company shares.

Am I entitled to pay tax on the bonus shares as stcg. Sir, I have received a sum of Rs. A sum of Rs. HiA very valuable article from you Mr. I have started intraday trading recently, I did it only once and my total profit is only rs but my traded value is 4 lac. I just want to know that if the traded value is anywhere related to income tax or we need to concerned about only the profit made and give income tax only on profit made.

Traded value Turnover has no significance as long as it remains below 1 crore. In your case, you need to show the profit of only Rs. Thanks for your article.

I wanted to know whether the tax advisory charges is a deductible expenses, if the profits are shown as STCG. Yes, the expenses can be deductible. However, one need to take the help of a CA to properly adjust the expenses.

Hi Sir, I started investing in stock market last year and I was in loss of Rs by the end of FY ,This year as of now I am in the profit of Rs and currently holding some position also in stock market. I am a salaried employee and my salary is above the tax slab of 2. Tax on My salary will be exempted because It will be within the 2.

You can adjust the loss in the current financial year, only if you had reported the same loss in the ITR of the last financial year FY Yes, your chartered accountant can easily classify that in the ITR. There is no such strict restriction. Hello sir I hv start trading in stock mkt in future and my last one month transaction was more then 10 crores.

I also earned 10k profit only. So what will be my tax liabilities. If I trade regularly in future my trasactions will be more then crores. So is it a problem so much transaction. Irrespective of the profit if the transaction value exceeds such figure then it requires the audit although no tax liability.

Contact with any CA for the detailed procedure. Hello, I did lot of intraday trading during the and the total amount bought and sold stands at 1,60,00, but during all of this I incurred a net loss of So what will the tax applicable and does this fall under audit case? Also the total of profit and loss stands at 90, As the IT-filling due date for is already past so it is recommended to consult with a CA for this matter.

Sir, i understand No tax for long term gain after 12 months. There is no tax liability on that income. No problem at all. Dear sir In futures trading,as for as my knowledge is concerned traded value is different and turnover is different, hope turnover is going to matter for audit purpose and not traded value. Yes, turnover is different than traded value and if turnover crosses 1 crore then only audit comes. Can I adjust STCL against my salary while filing ITR to get tax benefit.

Get in touch with CA for the detailed turnover calculation. I am living in Saudi as non working with my husband, I am using my husband money which he gave me for expenditure in India, till now my short term gain in 1Lac and investment around 7 Lac for this yr. What to do now? It is better to consult with a certified CA. The source of the money is important for taxation. For advance tax, you have time till 31st March Yes, tax is applicable. Whenever you sell at profit, the tax is applicable on it.

Thank you very much for valuable information sir. Sir I borrowed 15lkahs rupees from my friends and invested in stocks and shares in last four months through three different demat accounts in various brokerage companies with my name. Among them from two I lost 3 lakhs by intraday trading and short term investment. Am I go for audit. Am I file my loss this 15 lakhs profit. In what way I have to pay the tax.

How much it was sir. Am I pay they tax on turnover also sir.

Getting Started With Trading : Tax Guide for Traders in India

Please help with your suggestion sir. Due to higher volume, the reporting would be bit complicated. Take the help from qualified Chartered Accountant for IT filling.

Thank you very much sir. Sir,I am a salaried person. I also trade in equity. Should i file 2 different itr or only in offices with total income including salary and share profit under head income from other sources.

Need advice on tax filing. Still just to maintain goodwill our reply is as follows. One can adjust the current profit from the previous loss with timely reporting to the IT department. If I sell my shares and then the TAX will be collected by the company whose demat account, I holdright? No, you need to pay tax separately to the government while filling ITR at the end of the financial year.

Very well explained article. Helped me a lot. Thank you very much. Just going through the comments and got most of the answers. You have mentioned about the tax applied on the turnover. As broker provide huge margine for intra day my turnover is around 3 to 7 lakhs everyday I am doing trading since last one month and invested only 12k I have made only Rs profit till now.

So do I need to consider the turnover also for taxation or only the profit I made in intra day trading.? Tax is not applied on the turnover. Audit requirement is applied if turnover exceeds 1 crore in a financial year. You need to forward the entire ledger statement to the Chartered accountant for the audit requirement. In FY i have not done any trading. In this FYhow much income taxi have to pay.

If you reported the loss in earlier years during ITR filling then only it can be adjusted with current profit. Present the entire profit loss and ITR report to CA, they can only guide you after checking all documents.

And when all paid sites bored me, I happened to come across this website. May God bless you for your kindness. Short term capital gain tax is not deducted automatically. One has to pay it manually by year end. Your email address will not be published. Notify me of follow-up comments by email.

Tax Implications of Trading | Ally

Notify me of new posts by email. How to calculate and save income tax on share trading. Previous Article Next Article. All you want to know about it. Dilip Kumar Basak says: Dear Prasenjit, Thanks a lot for for your valuable information about income tax for share trading. Thank you, very informative article, answered my queries quite well. CAPT MERVYN MARK SEQUEIRA age 74 says: Balwant Singh Jain says: Brokerage can be deducted for the computation of net gain.

I have same doubt and found no answer. It is recommended to opt for professional CA firm for NRI taxation.

Asit Kumar Choudhury says: It means that you can deduct your brokerage from trading profit to calculate taxable income.

idonayojujid.web.fc2.com by Jason Varner: Tax Implications with Binary Options

Dear Sir, My father is a senior citizen. He has also earned Rs. R K Sharma says: Hi Prasenjit, I generally file my own it return. Thanks,please tell me what itr I have to fill if I bought shares and I am in service.

Kindly consult with any CA. Gold ETS are nothing but equity shares just like other shares, can u please reply. Intraday trading me 10lac profit 12 months me hota hai. To income tax kitna dena hoga. Prasenjit Greetings of the day! A K JAIN says: HiI am salaried and my salary is 3.

Yes, you are entitled to pay the tax as the shares are sold within one year. Now my question is, Tax on My salary will be exempted because It will be within the 2. And if yes ,then what i have to do now?? In your case, it is not taxable because the overall income remains below 2.

Thank you for your reply sir. Complicated means is there any problem for me sir. You need to file the single ITR mentioning two different source of income.

Leave a Reply Cancel reply Your email address will not be published. Ramanathan Srinivasan Member Since Jan, I was immensly benifitted. All recommendations are after very elobarate fundamental Analysis. Contact Info Paul Asset Consultant Private Limited 12B Pubpara, Belghoria KolkataIndia. MENU Lorem Ipsum is simply dummy text of the printing and typesetting industry.

Terms of Use Privacy Policy.