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Taxability on selling shares in 1 demat account and buying in another (same PAN)

developer 1 (2 Points)

17 January 2025

Hi All,

I want to know Taxability on selling shares in 1 demat account and buying in another (same PAN). is this treated as Intraday or regular buy and sell.

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Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294) (5976 Points)
Replied 17 January 2025

The taxability of selling shares in one demat account and buying in another (with the same PAN) depends on the timing and nature of the transactions. Tax Treatment The tax treatment will depend on whether the transactions are considered: 1. _Intraday Transactions_: If the sale and purchase transactions occur on the same trading day, they might be considered intraday transactions. Intraday profits are taxed as speculative business income, and the tax rate will depend on the individual's tax slab. 2. _Non-Intraday Transactions_: If the sale and purchase transactions occur on different trading days, they will be considered non-intraday transactions. In this case, the transactions will be treated as capital gains. Capital Gains Taxation If the transactions are considered capital gains, the tax treatment will depend on the holding period: 1. _Short-Term Capital Gains (STCG)_: If the shares are held for less than 12 months, the gains will be taxed as STCG, and the tax rate will depend on the individual's tax slab. 2. _Long-Term Capital Gains (LTCG)_: If the shares are held for 12 months or more, the gains will be taxed as LTCG, and the tax rate will be 10% (without indexation) or 20% (with indexation). Same PAN, Different Demat Accounts The fact that the transactions occur in different demat accounts with the same PAN does not affect the tax treatment. The tax authorities will consider the transactions based on the timing, nature, and holding period. Documentation and Record-Keeping To ensure accurate tax reporting, maintain proper documentation and records, including: 1. _Contract Notes_: Keep contract notes from both demat accounts, showing the transaction details, including date, time, and quantity. 2. _Demat Account Statements_: Maintain demat account statements, showing the transactions and holdings. 3. _Tax Returns_: Ensure you're filing your tax returns accurately, reporting the capital gains or speculative business income.

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