How Intraday Trading Is Taxed in India: Rules, Classification & Compliance

Intraday trading has become a popular way for many individuals in India to earn quick gains from short price movements. It offers fast opportunities, but it also carries important tax rules. Knowing how much tax on intraday trading applies helps traders plan better and avoid mistakes.

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What Counts as Intraday Trading?

Intraday trading involves buying and selling shares on the same day. You do not take delivery, and every trade settles before the market closes. Since these trades are short-term and driven by price action, the income is treated as business income.

How Intraday Trading Is Classified for Tax

The income from intraday trading is considered speculative business income. It falls under Profits and Gains from Business or Profession. The profit is added to your total income and taxed at your applicable slab rate. This keeps the structure simple and easy to follow for most traders.

Income Tax Slab Rates (FY 2025–26)

Old Tax Regime

New Tax Regime (From April 2025)

Turnover Rules for Intraday Traders

Turnover is calculated by adding the absolute values of both profits and losses. You do not net them off. This number plays a major role in determining audit requirements, so keeping clean records is important.

Tax Audit and Reporting

A tax audit becomes necessary when turnover crosses certain limits or when declared profits are lower than the required percentage. Traders must also file returns using the correct form and report all trading details clearly.

Advance Tax and Compliance

If your total tax liability exceeds the basic limit, advance tax applies. Those using presumptive taxation pay once a year, while others follow quarterly schedules. A clear understanding of the share market helps you separate short-term noise from long-term trends.

Conclusion

Intraday trading can be profitable when paired with proper tax planning. Track your trades, understand how much tax on intraday trading applies to your income, and follow compliance rules to trade with confidence.