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Income from share trading is taxable or not...?

indian (MBA) (40 Points)

21 June 2016

Sir/Madam... i have been investing in shares & earned reasonable profits also in last 5-6 months. i want to know whether income so earned is taxable, if yes then under which head & at what rate it is taxable... if it is taxable then can we do share trading by opening Dmat account in the name of a person whose income is well below 250000 per anum...pls reply

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subhash kumar jha (PROFESSION) (445 Points)
Replied 21 June 2016

Long term withh STT is exempted under section 10(38)

Short term with STT is taxable @ 15 %

Other long term capital Gain is taxable @ 20 %
Other short term capital gain is taxable as per slab

U can also do trading.

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Shishir Nayak ((Expert)) (369 Points)
Replied 21 June 2016

As per the present provisions of income-tax laws, any long-term capital gains arising on sale of equity shares listed on Indian stock exchange and sold through a stock-broker are fully exempt from income tax. For claiming this exemption, the equity shares should be sold on the platform of stock exchange in India on which Security Transaction Tax (STT) has been paid. In order to verify whether the shares sold by you are subjected to STT, please see the bill issued by your share broker. In case of profit on equity shares sold on stock exchanges in India held for less than 12 months are s taxed at a flat rate of 15 percent. This rate still will be 15 percent even in case the slab rate applicable to you is 30 percent. In case your other income excluding this short- term capital gains is less than basic exemption limit, you will be entitled to take the benefit of such shortfall in the basic exemption limit while calculating your tax liability. So if your total Income is less than or Equal to 2,50,000 including Short term capital gain than u need not have to pay any amount.

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Shishir Nayak ((Expert)) (369 Points)
Replied 21 June 2016

subhash kumar jha is right

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S. THIYAGARAJAN (ACCOUNTANT) (60 Points)
Replied 21 June 2016

vist www.tkapo.com to know more about acounting and taxation of share trading

Sujeet Italiya (CA Practice ) (24 Points)
Replied 22 June 2016

Dear,

As you mentioned in your question, you have earned reasonable profit in 5-6 month of trading in shares.so, there is no chance of Long term Capital gain on such trading.

If you have earned profit by trading in shares on delivery basis, Profit shall be charged under head capital gain @ 15%.

If F&O or Speculation transaction occured, profit shall be charged under head PGBP at normal slab rate.

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PRAVEEN KUMAR MANDA (ASST MANAGER ACCOUNTS) (22 Points)
Replied 22 June 2016

Dear sir/madam

this is praveen from hyderabad. recently my indian company invested in Dubai company. i need suggestions from concern auditors. anyone please suggest suitable auditor for foreign transactions.

Thanks

Praveen

Zoheb (Accountant Manager) (158 Points)
Replied 22 June 2016

Mr. Praveen you can give me your contact no. to discuss about the Audit.

regards

Zoheb

(7666215820)

indian (MBA) (40 Points)
Replied 15 July 2016

sir,

my question is if the person is earning approx 2 lakh per anum (short term investment) from share trading , now 2 lakh is exhemted from income tax. then still he is liable to pay income tax on earning from shares even the income is below taxable limit