Let’s understand which are considered as speculative and non-speculative income in the stock market. Intraday trading buying and selling the same day or selling and buying the same day is considered as speculative income. This income is considered as Business income and treated accordingly for taxation.
Futures and Options trading under the Derivative investments is also considered as a Business income but it is not called Speculative income, instead, it is considered as Non-speculative income as these instruments are used for hedging and also for taking/giving delivery of an underlying contract.
Now let’s come to income from shorter-term equity delivery based trades, held for 1 day to less than 1 year. Such delivery contracts also come under non-speculative income if frequency and the number of such trades is high. But such income is considered as a short term capital gain and taxed at 15%.
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