Level 13 of 13 · Tax and regulations
Taxes, Regulations and Important Indian Market Rules
By the end you will: understand indian market rules.
The final level covers how your profits are taxed, every charge on a trade, key documents you receive, and the rules that protect you. Tax rules and charges change often, sometimes every Budget. Every number here carries the date it was checked. Confirm with the Income Tax Department, your broker or a qualified tax professional before acting. This is general education, not tax advice.
Start with 13.1: What is short-term capital gains (STCG) tax?
0 / 18 topics0%
Taxes on market income
- 13.1What is short-term capital gains (STCG) tax?Tax on profit from selling listed equity shares or equity mutual fund units held for 12 months or less, where STT was paid.
- 13.2What is long-term capital gains (LTCG) tax?Tax on profit from listed equity shares or equity mutual funds held for more than 12 months, where STT was paid.
- 13.3How are equity delivery profits taxed?Delivery trades (buy, hold, sell) are capital gains: STCG if held ≤ 12 months, LTCG if longer. Losses can be set off.
- 13.4How is intraday trading income taxed?Intraday equity profits are speculative business income, taxed at your income tax slab rate.
- 13.5How is F&O income taxed?F&O profits are non-speculative business income, taxed at your slab rate. You file ITR-3.
- 13.6What is STT (Securities Transaction Tax)?STT is a tax on the value of each trade on a recognised exchange, collected by the broker for the government.
Charges and documents
- 13.7What are brokerage charges? (recap)The broker’s fee per trade, either flat (e.g. ₹20/order) or a % of value. Many discount brokers charge ₹0 for delivery.
- 13.8What are DP charges?DP (Depository Participant) charges are a flat fee charged when shares are debited from your demat (i.e. when you sell delivery shares),…
- 13.9What is GST on brokerage?GST at 18% is charged on brokerage, exchange transaction charges and SEBI fees (not on STT or stamp duty).
- 13.10What is stamp duty?Stamp duty is a state levy on the buy side of trades, collected centrally by exchanges since July 2020 at uniform rates.
- 13.11What is a contract note?A contract note is the legal record of your trades, sent by your broker by the end of each trading day you trade.
- 13.12What is an annual statement?Several yearly statements help you: the Consolidated Account Statement (CAS) from NSDL/CDSL of all holdings; the broker’s tax P&L; and…
Rules and protection
- 13.13What is a pledge of shares?Pledging means offering your shares as security (collateral) for a loan or for trading margin, while you remain the owner.
- 13.14What is margin against shares?You pledge holdings (shares, ETFs, some mutual funds) to your broker and get collateral margin (after a "haircut") to use for trading,…
- 13.15What is insider trading?Insider trading means trading on unpublished price-sensitive information (UPSI), like unannounced results or a merger, that you got…
- 13.16What is market manipulation?Market manipulation is artificially moving prices or volumes to mislead others: pump-and-dump, circular trading, fake news, or "front…
- 13.17What are SEBI’s investor protection measures?Safeguards that protect investors in India.
- 13.18You finished all 13 levels: what next?You now understand the whole Indian market ecosystem: shares, exchanges, orders, analysis, funds, IPOs, derivatives, risk and rules.