Do I need to Pay income tax on Profits booked in stock market?



I am a short term trader (Buy & Sell stocks 4-5days gap) on BSE/NSE,

from September-2007 to January-2008, I made 4.5million(45lakhs) turnover worth trading, but my net profit is only about Rs. 20,000

Do i need to pay the income tax? how the calculation is done? only on profit made transactions? what about my losses in trading & expences?

Do I need to Pay income tax on Profits booked in stock market?
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5 Replies to “Do I need to Pay income tax on Profits booked in stock market?”

  1. Yes, you need to pay income tax on your profits, but don’t forget to include all expenses (commissions and fees). Your net profit or loss is determined then by the greater of your realized gains/losses, so if your losses > gains, you don’t pay any tax, but if you haven’t closed out positions yet they do not get factored in



  2. Yes, you have to pay tax.There s no such exemption as per Income Tax Act, 1961 and subsequent amendments made from time to time.


  3. luk its simple…, if ur income is 20000p.a. then u r not included in the income tax slab rate n there4 need not to pay any kind of income tax on that….
    ingore ur tadings n turnover, wat tax department considers is only ur net income….
    u can calculate it easilly, just deduct ur business related expenditures 4m ur business income….
    yea u should remember that govt. charges tax on ur global income (if u r resident of India), global income means income earned by u throughout the F/Y (2007-08) 4m all over the world….
    if ur global income is more than 110000 after all the deductions then u have to pay tax accordingly….


  4. u will have 2 show that u have earned 20000 wid the help of the checks issued to and fro … i.e while buyin and sellin .. of each trascation…. also u willhave 2 add ur profit in ur income…. you can show trading charges which is nominal …. i am not sure about the losses





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