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One Response to “Income tax on profit/loss in share market?”

1. N J Reddy, on July 8th, 2010 at 8:17 am Said:

   If you are buying shares with the intention of investment and if your transactions are less (not daily and day trading), then this type of purchases and sales can be treated as investment buying. In this case the gains will be treated as capital gains. Capital Gains are two types. Short term and long term.

   If the shares are sold with in one year, then they will be treated as short term gains and the tax will be 15% (flat rate). If the shares are sold after one year, then they will be treated as long term gains and the tax on on it will be 0% (Tax free).

   If the shares are purchased and sold on daily basis and day trading, then it will be treated as trading and the income out of it will be added to the regular income and will be taxed as per slab rates.

   You have to calculate your gains and pay taxes.

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