Share Market Taxation, Understanding of taxation

Understanding stock market taxation is a must for investors who want to make maximum profits as per the legal guidelines. Investing in the stock market can be profitable but we need to buy or sell stocks keeping in mind our tax requirements.

Treatment of profits from equity shares
Income tax is levied on buying and selling equity shares in the stock market. Whenever we sell or market shares, we get profit which is called “capital gain” or “short term capital gain” which comes under capital gains. The calculation of short term capital gain or long term capital loss (STCG and STCL) depends on their holding period. Equity shares can be traded on the exchange after one year of purchase, capital gain is considered when a seller sells the shares at a price higher than the purchase price.