Tax calculation

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akbar (Querist)
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29 July 2011 I HAVE SALARY INCOME AS WEL AS INCOME FROM DAILY TRADING OF SHARES THROUGH BROKER LET ME GUIDE SHARE TRADING INCOME TAXABLE UNDER WHICH HEAD AND TO PREPARED TAX CONSOLIDATED TAX COMPUTAITON AND ITS RATE OF TAX.
PEASE CLEAR ABOVE QUETY ALONGH WITH SECTION REFERENCE
AKBAR

Preety Parik

Preety Parik (Expert)
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29 July 2011 1. It appears that your main source of income is from Salary and that you invest in Shares only for investments through a broker.

2.Daily Trading of Shares is also known as Intra Day trading, where a share is purchased and sold on the same day. The transaction is settled without delivery of shares. You do not pay money for purchase of shares and also do not receive sales amount on sales of shares. Only profit/ loss on sale of shares is credited/debited to your account and you pay or receive the difference of Sales Price- Purchase Price. Such transactions which are settled without obtaining delivery are speculative transactions. Only profit/ loss of such transaction can be accounted in the Books of Account. The Income from such transaction can be shown under any one head of Income :- 1) P/G of Business/ Profession under Speculative Profits
2) Other Sources. In both the case tax rate will be 30%

3. If Income is from sale of Shares, the delivery of which has been obtained either by physical share certificates or in electronic mode in DMAT form, then show it in under the head "Capital Gains"
Check the period of holding and whether STT on it is paid. if STT is paid, then
a.period of holding- 12 months or less- Short term capital gain - tax rate- 30%
b. period of holding- more than 12 months-long term capital gain - tax rate- NIL