Trading Taxes in India: STCG, Intraday, F&O and STT

Income tax on a trading profit and Securities Transaction Tax (STT) are different charges. Income tax depends on the type of income and your circumstances; STT depends on the transaction, even when you lose money. Start by separating delivery investments, cash intraday trades and futures or options instead of applying one rate to every trade.

Delivery shares, intraday and F&O: separate the income first

• Delivery investments: shares held as capital assets can produce short-term or long-term capital gains. Listed equity shares held for more than 12 months are generally long-term; those held for 12 months or less are short-term.
• Cash equity intraday: trades settled without delivery are generally treated as speculative business income, rather than short-term capital gains.
• Eligible exchange-traded futures and options: these are generally treated as non-speculative business income. The capital-gains holding-period rule is not a shortcut for taxing an F&O trade.
• Delivery shares held as trading stock: profits can be business income. Delivery alone does not settle the classification; the facts and accounting treatment matter.

Business income is normally included in income taxed at the applicable rates, subject to the relevant deductions and rules. Keep the categories separate and ask a chartered accountant to confirm classification, loss treatment and the return appropriate to your filing year.

Capital-gains rates for qualifying listed equity investments

For qualifying STT-paid listed equity investments, the capital-gains changes effective July 23, 2024 set the following base rates. These are not universal rates for all securities, all trades or all investors.

• Short-term capital gains: 20% base tax on qualifying gains.
• Long-term capital gains: 12.5% base tax on the qualifying annual aggregate above ₹1.25 lakh. The threshold is shared across qualifying gains, not available afresh for every sale or broker account.
• Applicable surcharge and cess can increase the final tax. Exemptions, losses, residency and other income can affect the computation.

Worked examples: gain is different from sale proceeds

• Short-term illustration: qualifying shares cost ₹1,00,000 and are sold for ₹1,10,000 after six months. Ignoring costs, losses and other adjustments, the gain is ₹10,000; 20% base tax is ₹2,000. This is not 20% of the ₹1,10,000 sale value.
• Long-term illustration: qualifying annual aggregate gains are ₹1,75,000. After the ₹1,25,000 threshold, ₹50,000 remains; 12.5% base tax is ₹6,250. This example excludes surcharge, cess and any other adjustments.

STT rates: equity and derivatives have different bases

For the following equity transactions, check the contract note against NSE schedules. The derivatives rates below apply from April 1, 2026; older derivatives trades use the rate in force on their transaction date.

• Delivery equity shares: 0.1% on the purchase value and 0.1% on the sale value, payable on the respective sides.
• Non-delivery cash equity: 0.025% on the sell side.
• Securities futures sold: 0.05% on the traded value, payable by the seller.
• Options sold: 0.15% on the option premium, payable by the seller.
• Options exercised: 0.15% on intrinsic value, payable by the purchaser. Exercise has a different tax base from selling an option premium.

Worked examples: transaction tax can apply to a loss

• Delivery example: buying ₹1,00,000 of shares produces ₹100 STT; selling them for ₹90,000 produces ₹90 STT. Total STT is ₹190 despite the trading loss, before rounding and other charges.
• Options-sale example: ₹10,000 of option premium sold attracts ₹15 STT at 0.15%. Do not calculate this sale charge on the underlying notional value.
• Futures-sale example: ₹10,00,000 traded value attracts ₹500 STT at 0.05%. Margin deposited with the broker is not the transaction value for this example.

STT is only part of trading costs. Brokerage, exchange charges, GST on applicable services, stamp duty and other levies are separate items. Use actual contract notes; these illustrations do not estimate the final amount deducted by your broker or your final income-tax liability.

Records to keep before filing your return

• Download contract notes and the annual broker tax P&L for every account, rather than relying on a screenshot of a daily profit.
• Keep purchase and sale dates, quantities, prices and charge details; retain demat statements for delivery holdings.
• Separate delivery capital gains, cash intraday results and F&O results. Record corporate actions that affect cost or quantity.
• Reconcile broker records with AIS and Form 26AS. An information statement does not replace transaction-level records.
• Retain earlier returns and loss schedules. Ask a chartered accountant about eligible set-off, carry-forward, filing deadlines, advance tax and any turnover or audit requirements.

Does paying STT settle my income tax?

No. STT is a transaction levy. It does not replace reporting income or paying the income tax that applies to your gains or business profits.

Are intraday profits taxed at the equity STCG rate?

Generally no: cash intraday income is usually speculative business income. Confirm your facts and filing-year rules rather than applying the delivery-equity capital-gains rate to it.

This guide was checked against the official sources below on October 8, 2026. It provides general education, not a personalised tax calculation. Consult a qualified chartered accountant for your return; the transaction date, filing year, residence status and asset type can change the answer.