How much profits can I make with intraday trading?

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.

It will be difficult to quantify the maximum profit in intraday trading that you can make before you start trading. While day trading profits can be quite lucrative, the losses can get amplified as well, if the market doesn’t move as per your expectations. Many people make thousands of rupees as intraday profits, some are reported to make lakhs even. You, too, can make profits in intraday trading if you make large volume calls, (the higher the margin, the more profits you can earn), have a high-risk appetite, and have the necessary experience and expertise in using the tools for technical analysis of stocks.

Before starting day trading, you must clearly define your strategy, thoroughly research the stocks you wish to trade in, and regularly monitor their movements. Risk management plays a critical role here. Using features such as Stop Loss orders, you can reduce your losses to avoid them from cutting away into your overall day trading profit.