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Showing posts from June, 2019

Tax Treatment of Future and Option

Tax Treatment of Future and Option

Futures and options are the two instruments in share market with which either you can be a billionaire or you will become a savage. That is the reason that future and option trading contribute most to the market turnover. In this post we will know about the tax treatment of future and option, tax rate in future and options in India, tax treatment of derivative transaction. So let's start.


We have already discussed about the tax treatment of income arising to investors in our previous post. You can check it here.

Taxation of income of Investors

Today we will discuss about Intraday Trading.


Basic Knowledge from INCOME TAX ACT

Intraday trading is considered as speculative transaction in INCOME TAX ACT, 1961 in India. So if you have profit from intraday trading then it will be treated as "speculative income". Similarly if you have suffered loss in intraday trading then it will be classified as "speculative loss".

Speculative loss can be …

How income from equity shares are taxed in India?

How income from equity shares are taxed in India?

Welcomed to an another interesting discussion regarding stock market where we will be discussing about the taxation of income received from equity shares in the hand of investors. Let's start.

Types of Income from Stock market

There are three types of income which an investor can earn from equity shares.

1. Dividend Income
2. Short Term capital gain
3. Long Term Capital gain

Let's discuss about the taxation of these income.





1. Dividend income

Equity shareholders get dividend from companies which is a kind of distribution of profit earned throughout the year. It is given on the face value of shares. 

Suppose a company's share's face value is 5/- and company paid 200% dividend, that means each investor in equity shares will get 10/- per share.

Earlier dividend income was fully exempt in India and so many foreign investors were interested in investing in India. But  now it is not fully exempted rather partially exempted. 

As per secti…