Lets discuss Tax on Share Trading here, The income you earn from the sale of shares is subject to taxes. Many investors enter the stock market without conducting research on stock investments.

Basically, each investor is supposed to pay a specific amount of tax on the capital gains. Tax regulations in India vary depending on the investment instruments.

For example, the tax levied on the commodities is different from the same charge on the equity investments.

If you are unable to meet the tax obligations and make the payment on time, then you will have to bear the financial penalties.

Types of capital gains

The total tax you pay will depend on the total profit you make from share trading. There are two types of capital gains:

  •     Short-term capital gains
  •     Long-term capital gains

As the name implies, the short-term capital gains refer to the amount you earn from selling the shares within 12 months of the date you purchased them.

In other words, if you sell the shares within 1 year, you earn short-term capital gains.

The examples are the money you make from intra-day trading. It goes without saying that you make the short-term gains when you sell the shares at a price higher than the purchased price.

At the same time, the long-term capital gains happen when you sell the shares listed on the stock exchanges after 12 months of the date you purchased them.

In other words, you need to hold on to the investment for more than a year to earn long-term capital gains. According to the 2018 Financial Budget laws, if the investor makes a profit of more than 1 Lakh from the long-term capital gains, then they will have to pay 10% of tax on the amount earned.

You get to keep all your income from the long and short-term gains once you have paid the taxes.

Tax Rules on Short-term and Long-term Gains

No matter what your tax slab is, the short-term gains are subject to a fixed 15% tax on the money you make from the share market.

It is important to note that your income from long-term gains is not taxable as long as the amount does not exceed INR 1 Lakh. As soon as you go beyond that, you will have to pay 10% of tax on the income.

Now, there are certain rules you need to follow when investing in the share market. For example, each transaction needs to be carried out on a reputable stock exchange.

No Tax will be exempted if you purchase and sell the shares outside India. If your income falls below the exemption limit, then you could be exempted from the tax.

However, you are not going to be exempted from the tax payments if you make a large number of trades every single day.

It is important to note that the profits you make from the intra-day trading will be counted as the speculative business income. Now, these profits are not taxed individually.

They are rather added to the total income slab. In simple terms, it refers to the progressive tax that is charged on the total income you make by the end of the year.

Fortunately, Indian trading rules are not as complex as they seem.

It is calculated based on the choosing right investment instruments and how longer decided to stay invested in the share market.

Like other gains, you have to pay higher if you make a good amount from the share market.

Both short-term and long-term gains have a fixed tax rate, which is 15% and 10% respectively.


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The Share Market: A Guide to Trading – Gill Broking

It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more.

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

Names and contact details of all Key Managerial Personnel including Compliance Officer

Sr. No.Name of the IndividualDesignationContact NumbersEmail Id
1 Charanpreet GillCEO/
2 Charanpreet GillWhole Time
3 Charanpreet GillCompliance
4Manpriya GillDesignated
5Kewal GillDesignated

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