In India, intraday trading is considered a form of speculative activity, and therefore, it is subject to taxes under the Income Tax Act, 1961. Intraday traders are required to pay taxes on their profits, and the tax rates depend on the type of taxes applicable. Here are the types of taxes that intraday traders in India may have to pay:

  1. Securities Transaction Tax (STT): The Securities Transaction Tax (STT) is a tax levied on the purchase and sale of securities, including shares, bonds, derivatives, and units of mutual funds. It is applicable to intraday trading as well. The STT rate for intraday trading is 0.025% of the total transaction value, which is levied on both the buyer and the seller. However, if an intraday trade results in a loss, the STT paid on that trade can be set off against the profits made on other trades in the same financial year.
  2. Income Tax: Intraday traders are required to pay income tax on the profits made from their trades. The profits are treated as short-term capital gains and are added to the trader’s total income for the financial year. The tax rate on short-term capital gains for intraday trading is as per the trader’s tax slab, which varies based on their income. In the case of losses, the trader can set off the losses against the gains made in the same financial year. If the losses exceed the gains, the trader can carry forward the losses to the next financial year and set them off against future gains.
  3. Goods and Services Tax (GST): Intraday trading is subject to Goods and Services Tax (GST) if the trader’s annual turnover exceeds Rs. 20 lakhs. The GST rate for intraday trading is 18% of the brokerage fees charged by the broker. In addition to the GST, intraday traders may also have to pay other charges like securities transaction tax, stamp duty, and service tax.
  4. Stamp Duty: Stamp duty is a tax levied on the transfer of securities, including shares, bonds, and debentures. It is charged by the state government and varies from state to state. The stamp duty on intraday trading is generally a small percentage of the total transaction value, typically between 0.002% and 0.004%. The stamp duty is usually paid by the broker on behalf of the trader and is reflected in the contract note.

In conclusion, intraday traders in India are subject to various taxes, including Securities Transaction Tax (STT), Income Tax, Goods and Services Tax (GST), and Stamp Duty. The tax rates for intraday trading vary based on the type of tax and the trader’s income and turnover. It is essential for intraday traders to keep track of their profits and losses and comply with the tax laws to avoid any legal or financial penalties.

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Ajay Kumar


Ajay Kumar is an entrepreneur who started his career early at age of 16. He started his own company at age of 21, made it a success. He has the ability as excellent stock market analyst with technical knowledge of the subject; Ajay can help you save a lot of money which you give the market after making your losses. He is the only one who has made INNOVATORS AND YOU as the best and the fastest growing institute for stock market in ASIA. Ajay Kumar is an MBA Professional with vocational experience in financial analysis. He is Expert in proceeding placements and imparting workshops. Active orator in share markets, micro/macro economics and stock analysis. A wordsmith in writing articles. Certificate holder in various modules of top financial institutes. Proficient in providing knowledge of financial modeling, financial derivatives, financial markets, ratio analysis, corporate valuation, mutual fund and much more.


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