Income Tax on Equity Share Trading

Understanding Equity Trading Involves buying and selling stocks, including various instruments like delivery, intraday, and futures. Equity Delivery Trading Purchase shares intending to hold for more than a day. Income treated as Capital Gains or Non-Speculative Business Income. Equity Intraday Trading Buying and selling shares within the same day. Treated as Speculative Business Income for tax purposes.

Equity F&O Trading Buying/selling futures or options contracts based on equity. Income categorized as non-speculative business income. Classification of Income Depends on factors like trading activity level and intention of the trader.

CBDT Circular Guidelines Provides clarity on classifying income from listed and unlisted shares. Income Tax Rates Vary based on whether income is Capital Gains or Business Income.

Tax Calculation Involves slab rates, surcharge, and Health & Education cess. Turnover Calculation Important for determining tax audit applicability, especially for business income.