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What are the tax implications on the profits earned from intraday trading?
What are the tax implications on the profits earned from intraday trading?
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The profits earned from intraday trading are deemed speculative business income. Therefore, intraday trading profit is taxable under the income head of ‘Profits and Gains from Business and Profession’. Had you taken delivery of the securities, the Capital Gains Tax would have been levied, but in intraday trading there is no ownership and all positions are squared off.
For filing the returns for taxation on intraday trading, you will need to fill the form ITR-3; based on the tax regime that you choose (old vs new) and the tax slab you fall under in the regime opted for. Based on your earnings, if it is estimated that your payable tax (for the financial year) is above Rs.10,000, then you will be required to pay advance tax on the dates specified by the Income Tax Department which is usually the middle of the last month of each quarter of the year.