{"id":8822,"date":"2025-03-18T10:50:13","date_gmt":"2025-03-18T10:50:13","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8822"},"modified":"2025-03-18T10:50:13","modified_gmt":"2025-03-18T10:50:13","slug":"overview-on-taxation-of-gains-from-equity-shares","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/overview-on-taxation-of-gains-from-equity-shares\/","title":{"rendered":"Overview on Taxation of Gains from Equity Shares"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-7406\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/photo_2024-06-20_22-20-55.jpg\" alt=\"Budget, 2024-25 in F&amp;O transactions\" width=\"1179\" height=\"1068\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/photo_2024-06-20_22-20-55.jpg 1179w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/photo_2024-06-20_22-20-55-300x272.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/photo_2024-06-20_22-20-55-1024x928.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/photo_2024-06-20_22-20-55-768x696.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/photo_2024-06-20_22-20-55-800x725.jpg 800w\" sizes=\"(max-width: 1179px) 100vw, 1179px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69deed0c3e1e0\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69deed0c3e1e0\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/overview-on-taxation-of-gains-from-equity-shares\/#Taxation_of_Gains_from_Equity_Shares\" title=\"Taxation of Gains from Equity Shares\">Taxation of Gains from Equity Shares<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/overview-on-taxation-of-gains-from-equity-shares\/#Summary_Table_of_Taxation_of_Gains_from_Equity_Shares\" title=\"Summary Table of Taxation of Gains from Equity Shares\">Summary Table of Taxation of Gains from Equity Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/overview-on-taxation-of-gains-from-equity-shares\/#Securities_Transaction_Tax\" title=\"Securities Transaction Tax: \">Securities Transaction Tax: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/overview-on-taxation-of-gains-from-equity-shares\/#CBDT_Guidelines_Report_their_share_trading_activities\" title=\"CBDT Guidelines Report their share trading activities\">CBDT Guidelines Report their share trading activities<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/overview-on-taxation-of-gains-from-equity-shares\/#1_Classification_Criteria\" title=\"1.\u00a0\u00a0\u00a0\u00a0\u00a0 Classification Criteria\">1.\u00a0\u00a0\u00a0\u00a0\u00a0 Classification Criteria<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/overview-on-taxation-of-gains-from-equity-shares\/#2_Calculation_Methods\" title=\"2.\u00a0\u00a0\u00a0\u00a0\u00a0 Calculation Methods\">2.\u00a0\u00a0\u00a0\u00a0\u00a0 Calculation Methods<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Taxation_of_Gains_from_Equity_Shares\"><\/span><span style=\"color: #000080;\"><strong>Taxation of Gains from Equity Shares<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>Short-Term Capital Gains (STCG) : Gains from selling equity shares listed on a stock exchange within 12 months of purchase. Tax Rate on STCG is @ 15%<\/li>\n<li>Long-Term Capital Gains : Long-Term Investor is holding shares for over a year before selling. Capital Gains. LTCG taxed at 10% on gains exceeding \u20b91 lakh. Gains from selling equity shares listed on a stock exchange after 12 months of purchase. Tax Rate is 10% on gains exceeding \u20b91 lakh (post 1 April 2018, without indexation benefit) Long term capital Gains up to 31 January 2018 are exempt.<\/li>\n<li>Loss from Equity Shares \u2013 Short-Term Capital Loss : Can be set off against STCG or LTCG from any capital asset. Up to 8 years, adjustable against any capital gains.<\/li>\n<li>Long-Term Capital Loss (LTCL) : Can only be set off against LTCG. Up to 8 years, adjustable against LTCG.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Summary_Table_of_Taxation_of_Gains_from_Equity_Shares\"><\/span><span style=\"color: #000080;\">Summary Table of <a href=\"https:\/\/carajput.com\/archives\/taxation-of-share-transaction-and-disclosing-fando-income.pdf\">Taxation of Gains from Equity Shares<\/a><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<thead>\n<tr>\n<td><span style=\"color: #000080;\"><strong>Type of Gain\/Loss<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Definition<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Tax Rate<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Set-off<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Carry Forward<\/strong><\/span><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>STCG<\/td>\n<td>Sale within 12 months<\/td>\n<td>15%<\/td>\n<td>Against STCG or LTCG<\/td>\n<td>8 years<\/td>\n<\/tr>\n<tr>\n<td>LTCG<\/td>\n<td>Sale after 12 months (post 1 April 2018)<\/td>\n<td>10% (above \u20b91 lakh, no indexation)<\/td>\n<td>Against LTCG<\/td>\n<td>8 years<\/td>\n<\/tr>\n<tr>\n<td>STCL<\/td>\n<td>Loss within 12 months<\/td>\n<td>Not applicable<\/td>\n<td>Against STCG or LTCG<\/td>\n<td>8 years<\/td>\n<\/tr>\n<tr>\n<td>LTCL<\/td>\n<td>Loss after 12 months (post 1 April 2018)<\/td>\n<td>Not applicable<\/td>\n<td>Against LTCG<\/td>\n<td>8 years<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Securities_Transaction_Tax\"><\/span><span style=\"color: #000080;\"><strong>Securities Transaction Tax: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Securities Transaction Tax applicable &amp; Levied on all equity shares transactions on a stock exchange. Registration charges, brokerage, and other charges are deductible from the sale value to calculate net gain or loss.<\/p>\n<p>Securities Transaction Tax Collections see a major surge in the first three months of FY 2024-25, April 1-July 11 STT Collections rise nearly 130% YoY Source &#8211; CNBC TV18<\/p>\n<h3><span class=\"ez-toc-section\" id=\"CBDT_Guidelines_Report_their_share_trading_activities\"><\/span><span style=\"color: #000080;\">CBDT Guidelines Report their share trading activities<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-7405\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/FO-Transaction-and-44AD.jpg\" alt=\"F&amp;O Transaction and 44AD\" width=\"941\" height=\"1161\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/FO-Transaction-and-44AD.jpg 941w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/FO-Transaction-and-44AD-243x300.jpg 243w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/FO-Transaction-and-44AD-830x1024.jpg 830w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/FO-Transaction-and-44AD-768x948.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/06\/FO-Transaction-and-44AD-800x987.jpg 800w\" sizes=\"(max-width: 941px) 100vw, 941px\" \/><\/h2>\n<h4><span class=\"ez-toc-section\" id=\"1_Classification_Criteria\"><\/span><span style=\"color: #000080;\">1.\u00a0\u00a0\u00a0\u00a0\u00a0 Classification Criteria<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>The classification of gains or losses from the sale of shares as &#8216;business income&#8217; or &#8216;capital gains&#8217; depends on several factors:<\/p>\n<ul>\n<li>Volume and Frequency of Transactions: High frequency and volume, particularly in intraday trading or futures and options, may indicate business income.<\/li>\n<li>Intent: If the intent is to profit from short-term price movements, it is typically treated as business income.<\/li>\n<li>Holding Period: Longer holding periods often suggest capital gains, while shorter periods suggest business income.<\/li>\n<\/ul>\n<h4><span class=\"ez-toc-section\" id=\"2_Calculation_Methods\"><\/span><span style=\"color: #000080;\">2.\u00a0\u00a0\u00a0\u00a0\u00a0 Calculation Methods<\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>o\u00a0\u00a0 Income from Business: All expenses incurred in earning the business income can be deducted. Profits are added to the total income for the financial year and taxed at applicable slab rates. ITR-3 is required, showing income from share trading under &#8216;income from business &amp; profession&#8217;.<\/p>\n<p>o\u00a0\u00a0 Income from Capital Gains: Expenses incurred on the transfer can be deducted. Short-Term Capital Gains (STCG) are taxed at 15%. &amp; Long-Term Capital Gains (LTCG) over \u20b91 lakh are taxed at 10%. ITR Form Depending on other income sources, typically ITR-2 is required.<\/p>\n<p><span style=\"color: #000080;\"><strong>Summary position mention here under :\u00a0<\/strong><\/span><\/p>\n<table>\n<thead>\n<tr>\n<td><span style=\"color: #000080;\"><strong>Criteria<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Business Income<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Capital Gains<\/strong><\/span><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Volume\/Frequency<\/td>\n<td>\u00b7<\/td>\n<td>High (e.g., day trading, F&amp;O trading)<\/td>\n<td>Low to moderate<\/td>\n<\/tr>\n<tr>\n<td>Intent<\/td>\n<td>\u00b7<\/td>\n<td>Short-term profit<\/td>\n<td>Long-term investment<\/td>\n<\/tr>\n<tr>\n<td>\u00b7Expenses Deduction<\/td>\n<td>\u00b7<\/td>\n<td>All business-related expenses<\/td>\n<td>Transfer-related expenses only<\/td>\n<\/tr>\n<tr>\n<td>Tax Rate<\/td>\n<td>\u00b7<\/td>\n<td>Normal slab rates<\/td>\n<td>15% (STCG), 10% on gains &gt; \u20b91 lakh (LTCG)<\/td>\n<\/tr>\n<tr>\n<td>ITR Form<\/td>\n<td>\u00b7<\/td>\n<td>\u00a0ITR-3<\/td>\n<td>\u00a0Typically ITR-2<\/td>\n<\/tr>\n<tr>\n<td>CBDT Circular (Listed Shares)<\/td>\n<td>\u00b7<\/td>\n<td>Option to choose, consistent in subsequent years<\/td>\n<td>Option to choose, consistent in subsequent years<\/td>\n<\/tr>\n<tr>\n<td>Unlisted Shares<\/td>\n<td>\u00b7<\/td>\n<td>Not applicable<\/td>\n<td>Always treated as capital gains<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-7098\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/04\/Stock-taxation-.jpg\" alt=\"Taxation on Gains from Sale of Foreign Shares:\" width=\"907\" height=\"1280\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/04\/Stock-taxation-.jpg 907w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/04\/Stock-taxation--213x300.jpg 213w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/04\/Stock-taxation--726x1024.jpg 726w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/04\/Stock-taxation--768x1084.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2024\/04\/Stock-taxation--800x1129.jpg 800w\" sizes=\"(max-width: 907px) 100vw, 907px\" \/><\/h2>\n","protected":false},"excerpt":{"rendered":"<p>Taxation of Gains from Equity Shares Short-Term Capital Gains (STCG) : Gains from selling equity shares listed on a stock exchange within 12 months of purchase. Tax Rate on STCG is @ 15% Long-Term Capital Gains : Long-Term Investor is holding shares for over a year before selling. Capital Gains. LTCG taxed at 10% on &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[173],"tags":[1157],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8822"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8822"}],"version-history":[{"count":1,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8822\/revisions"}],"predecessor-version":[{"id":8823,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8822\/revisions\/8823"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}