Thursday, January 18, 2007

Tax on profits made in shares

There is no tax on dividend.

When you sell any asset you own (house, land, shares, mutual fund units, gold, debentures, bonds), and you make a profit on the sale, it is known as capital gain.

If you sell your shares after a year, the profit you make is referred to as long-term capital gain. There is no tax on long-term capital gain.

If you sell it within a year of buying, it is referred to as short-term capital gain and taxed at 10% of the profit made.

2 comments:

Venkat S Murthy said...

furkhan,
were the profits frm trading taxed separetly ....
i mean to ask,
arent the profits from trading added to income and then taxed? or were they taxed separately....

Furkan said...

Hi Murthy...

See there are two cases...
Case 1:
If ur other income is more than 1 lakh then short term tax on shares will be 10% of ur profit in shares...
Case 2:
If your other income is less than 1 lakh ...say u have an other income of 90000..then 10000 will be deducted from ur short term capital gain and the remaining amount will be taxed at 10%...