How Are Gains From Intraday Trading Taxed?
- 13th October 2025
- 12:00 AM
- 8 min read
Intraday trading can give you quick profits with high liquidity, but understanding its tax application is also crucial. The tax rate depends on your total annual income and falls under your individual tax slab rates, which range from 5% to 30%, based on the tax regime you choose.
This blog analyses how income tax on intraday trading is applied by highlighting both the old and the new tax regimes.
What are Capital Assets and Trading Assets?
Capital assets and trading assets have different purposes and tax treatment. Trading assets entails buying and selling assets for short-term gains. Contrarily, capital assets are held for long-term investments.
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Capital Assets
Investors hold these assets for long-term investment purposes, which include anything from stocks to bonds. The gains or losses on the sale of capital assets are taxed as capital gains or losses. Furthermore, these are classified as long-term and short-term capital gains depending on how long these assets are held.
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Trading Assets or Stocks-in-Trade
Traders buy and sell these securities frequently to make a profit from short-term price movements. A trader’s income is considered business income, and they have to report this income under ‘Profits and Gains from Business or Profession’.
Rules of Intraday Trading Income Tax – Income Head, ITR Form And Due Date
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Income Head
The gains from intraday trading fall under the ‘Profits and Gains from Business or Profession’. This income will be classified as speculative business income. The reason is that you are trading without the intention of taking delivery of the contract.
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ITR Form
You must file the ITR-3 form and prepare financial statements because intraday trading is business income. Ascertaining the correct ITR-3 form is also necessary to ensure compliance with tax regulations and avoid potential penalties.
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ITR Due Date
The last dates of ITR filing for FY2025-26 are:
- September 15, 2025 – if tax audit is not applicable
- October 31, 2025 – if tax audit is applicable
Understanding Turnover for Intraday Trading
An intraday trading turnover is also known as the absolute amounts of gains or losses. Absolute turnover is the total of positive and negative differences. You must noṭe that the loss amount will not be deducted but added to the profit amount. You can calculate the trading turnover either as a scrip-wise or a trade-wise procedure.
For example, you buy 100 shares of company X at INR 100. You sell them at the end of the day at INR 110. The following day, you buy 200 shares of Y at INR 150 and sell them at INR 100 at the end of the day.
Your profit from the first trade will be – (110-100) x 100 = INR 100
Your loss from the second trade will be – (150-100) x 200 = INR – 10,000
The absolute turnover will be – (10,000 + 100) = INR 10,100
The total value of your profits and losses from intraday trading activities is INR 10,100.
Whether or Not a Tax Audit is Applicable for Intraday Trading?
Whether a tax audit is required for intraday trading depends on various factors:
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If You Choose Presumptive Taxation
Tax audit is not applicable if your intraday trading turnover is less than INR 3 crore, and if you have gains of a minimum 6% of trading turnover.
However, a tax audit is applicable in this case if you have incurred a loss or you are reporting gains lower than 6% of trading turnover, and your total income is higher than the Basic Exemption Limit.
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If You Do Not Opt for Presumptive Taxation
You cannot opt for the presumptive scheme under section 44AD if the turnover is more than INR 3 crore. A tax audit is applicable in this case. If your turnover is less than INR 1 crore, you do not have to pay taxes even if you do not opt for presumptive taxation.
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Trading Turnover More Than INR 10 crore
If the turnover exceeds INR 10 crore, regardless of gains or losses, a tax audit is compulsory. This is applicable if more than 95% of your transactions are conducted digitally.
Calculation of Tax for Intraday Trading
Calculating the tax on intraday trading gains involves understanding how income tax is computed based on prevailing slab rates. The Income Tax Act outlines different slab rates for various income levels, subject to adjustments with the applicable surcharge rate plus a 4% cess.
Old Tax Regime
The table below highlights the tax rates under the old tax regime:
| Income Range | Tax Rate |
| Up to INR 2.5 lakh | NIL |
| INR 2.5 lakh to INR 5 lakh | 5% |
| INR 5 lakh to INR 10 lakh | 20% |
| More than INR 10 lakh | 30% |
New Tax Regime Before Budget 2024
The table below includes the applicable tax slabs before the announcements made in the Union Budget 2024:
| Income Range | Tax Rate |
| Up to INR 3 lakh | NIL |
| INR 3 lakh to INR 6 lakh | 5% |
| INR 6 lakh to INR 9 lakh | 10% |
| INR 9 lakh to INR 12 lakh | 15% |
| INR 12 lakh to INR 15 lakh | 20% |
| INR 15 lakh and above | 30% |
New Tax Regime After Budget 2024
The table below shows the applicable tax slabs under the new tax regime:
| Income Range | Tax Rate |
| Up to 3 lakh | NIL |
| INR 3 lakh to INR 7 lakh | 5% |
| INR 7 lakh to INR 10 lakh | 10% |
| INR 10 lakh to INR 12 lakh | 15% |
| INR 12 lakh to INR 15 lakh | 20% |
| INR 15 lakh and above | 30% |
Example
Let us understand the calculation of income tax with an example. Suppose A is an intraday trader who is 30 years old. His annual salary equals INR 10 lakh.
For the year 2024-25, his intraday equities trading generated INR 2.5 lakh and INR 1.5 lakh was made via futures and options trading.
His capital gains = INR 70,000
His annual interest on bank deposits = INR 90,000. As per the tax slabs under the new tax regime, he has to pay 15% tax on his capital gains, which will be:
INR (70,000 x 15%) = INR 10,500
Salary, speculative and non-speculative business revenue, and interest on bank savings are all added together to determine total taxable income, which comes to INR 15,60,000.
Advance Tax Payment for Intraday Trading
You will have to pay advance tax on the designated days if your projected tax liability for the year exceeds INR 10,000.
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Advance Tax for Intraday Traders Who Do Not Use Section 44AD’s Presumptive Taxation
Intraday traders are required to pay advance tax in the following four instalments if they do not opt for presumptive taxation:
Advance Tax Due Date 15% of Total Tax Liability By June 15 45% of Total Tax Liability By September 15 75% of Total Tax Liability By December 15 100% of Total Tax Liability By March 15 -
Advance Tax for Intraday Traders Who Choose Presumptive Taxation
Intraday traders who choose presumptive taxation must pay advance tax in a single instalment by March 15.
Final Thought
It is important to be aware of the income tax on intraday trading. Intraday trading profits are taxed as business income, which means that they are taxed at the individual’s marginal income tax rate. There is no separate tax rate for intraday trading profits. You must keep track of your trades and calculate tax liability accurately to avoid any legal issues.
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Frequently Asked Questions
1. Are taxes applicable to intraday trading gains as capital gains?
Yes, gains from intraday trading are taxed according to the appropriate slab rates, classified as short-term capital gains, and added to taxable income.
2. Do I have to pay tax on intraday trading for losses?
Certain capital gains from mutual funds and stocks are excluded under Section 10(38), while long-term capital gains are taxed at reduced rates. However, intraday gains and losses are subject to standard slab rates of tax.
3. Are taxes applicable to intraday trading profits differently for individuals and companies?
Yes, in India, the taxation on intraday trading earnings varies for both individuals and companies. For individuals, this income is taxed at the rates of your individual income tax bracket, which is up to 30%, after being added to your overall income. Contrarily, companies must pay corporate tax rates, which change based on things like turnover and whether they choose tax breaks.
4. Is there any tax exemption for intraday trading gains?
No, gains from intraday trading are not specifically excluded from taxes in India. Rather, the Income Tax Act treats intraday trading earnings as ‘speculative business income’.
5. What is Carry Forward Loss in Intraday Trading?
Speculative business loss is the term used to describe losses resulting from intraday trading. Only if you file the return by September 15, 2025, for FY 2024–2025 or October 31, 2025, will it be carried forward to the next four years. Only speculative business revenue can be used to cover speculative business losses.
