Taxation on equity

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Speculative business income:

Income from intraday equity trading is considered speculative.

Non-speculative business income:

Income from trading F&O  on all the exchanges is considered as non-speculative business income.

Taxation:

Intraday and F&O income have to be added to your other income (salary, other business income, bank interest, rental income, and others), and taxes paid according to the tax slab.

Short-term capital gain is taxed at 15% + cess.

Long term capital gain taxed at 10% + cess over above Rs.100,000/-

Dividend Income

All dividend income received is taxed as per income tax slabs. The standard rate of TDS is 10% deducted on dividend income paid in excess of Rs 5,000 from a company or mutual fund.

Carry forward 

  1. Intraday losses can be carried forward for 4 years. 
  2. F&O losses can be carried forward for 8 years.
  3. Short-term & Long term capital losses can be carried forward for 8 years.
Offsetting in Gains & Loss:
  1. F&O gains can be set off against any other business income except salary income in the same year. F&O losses can be set off against only nonspeculative business income.
  2. Intraday gains can be offset against Intraday losses. Intraday losses can be set off against only Intraday gains. 
  3. Long-term capital gain can be offset only long term. Long Term Capital Loss can be set off only against Long Term Capital Gains. 
  4. Short-term capital Loss can be offset against both long-term and short-term. 


Disclaimer – Do consult a chartered accountant (CA) before filing your returns for more clarity. The above content is for understanding. 

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