ITR filing: How income from stock market is taxed — explained
Income tax calculator: An income made on sale and purchase of shares fall under the business income or capital gain head. So, those who made money in recent stock market rally need to know how their income from stock market will be taxed. According to tax and investment experts, income from stock market is calculated on the basis of holding period. If the investor has hold the stock for more than 12 months, then the income will fall under long term capital gain category. However, if the holding period is less than or equal to 12 months, then the stock market income would be called short term capital gain.
Speaking on how income tax applies on stock market gains, Sujit Bangar, Founder at Taxbuddy.com said, «Income earned from stock market is taxed either as business income or capital gain. If stocks are sold with under line delivery, it’s non speculative. This type of transaction can be taxed as normal business income or capital gain. If you are holding shares in your trading Portfoio, the income or loss on account of sale, purchase of these shares is considered as business income. Even trading in futures and options is considered as non speculative business income.»
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