Stock market trading and tax liability

gsharma 1
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Hi Pankaj,

I have some queries related to stock market trading and "Securtieis Transaction Tax(STT)" for share trading in delivery (cash). I have recently started investing/trading. I am currently trading around Rs.100000/- in different stocks. I keep buying and selling stocks in delivery/cash. I haven't kept any stock for more than 2 months. It will be really nice of you if you could answer my following queries related -

As I know STT is applied to any transaction performed whether purchase or sale of shares and the current rate is 0.1%. Now following are my queries -

1- This 0.1% of STT is applied on the "gains" only or on the whole amount?

2- What if loose partial or whole money. For example i invested Rs 5000 on some shares and few days i sold them on loss and get Rs. 3000. What will be the scenarios in this case? Still the STT is applicable?

3- Refering to the above query if STT is applied even on transaction with loss of money then is it possible I can ask for refund from Income Tax department?

5- Once i have paid STT, then Is there any more Tax liability remain left on my side?

6- If I loose any money in stock market then can I show losses to income tax dept and deduct this lost amount from final taxable income to calculate the income tax. Or what is the clause for loss from stock market?

Thanks in Advance!

Best Regards Gaurav

short-term-loss securities-transaction stock-trading stt income-tax
1 Answers

STT is securities transaction tax and applicable on all transactions in Indian stock market, whether you buy a stock or sell it.

STT has nothing to do with gains/loss, it would be levied every-time on each transaction on transaction value.

STT and income tax has no relation. If you are doing share trading as business, you can claim STT as a business expense, otherwise there is no deduction available for STT paid.

STT amount won't be refunded in case of incurred losses.

Even if you have paid STT, there is income tax liability on capital gains. Capital losses can also be set off against capital gains. Capital losses can also be carried forward to next year.

In case of long term gains (stocks kept for over a year), there is no income tax payable on such gains. For gains for less than a year, 15% income tax is payable on gains. Such gains can also be setoff against losses to minimize tax.

Pankaj Batra5212
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