Profits of FNO to invest and taxation

Sir/Madam, one small doubt,

I am an employee and a part time trader, I am earning consistently from very recently from positional trading, duration ranging from 1-5 days for each trade, I am earning good profits, but I want to create long term wealth creation by investing in Stocks and earn Dividends ( perfect source of income)

My doubt is if, I have gained a profit of 15-20 lakhs in a financial year from positional or Intraday trading and invest same profits in stocks for long term wealth creation

Am I still have to pay, taxes under income tax for that financial year

As net gains from stock market will be zero, only things will be Deductions from the trades, as I have invested entire profits in Stock market self

Please clarify my doubt, will be waiting for it

Hello @Srinivasagri,

Under stock trading, Income arises whenever there is a sale of securities or derivatives. You must report profit from intraday trading as a speculative business income under the head PGBP. You can claim trading expenses and report the net profits as taxable income in the ITR. Income Tax is applicable as per slab rates. Such profits can be adjusted with loss under other heads such as Non-Speculative Business Loss and House Property Loss.

Investing the profit in stocks for long-term wealth creation would not reduce tax on the intraday profits earned. You can explore options for tax-saving investments under Chapter VI-A that would reduce the tax liability. On the sale of newly invested stocks, there would be a taxable income in future years and tax would be applicable as per prevailing rates and provisions.