top of page

Tax Treatment and Applicability of Audit for Intraday Trading in India

With improving IT infrastructure such as swift Internet and availability of Smartphones, Investors' education has shown phenomenal development. With this, stock traders in India have been grown expeditiously. Today in this article we have tried to simplify perplexity of tax treatment, Tax Audit Applicability on Intraday Trading, Calculating Turnover for Intraday Trading under Income Tax Provisions.

First, let us talk about what is Intraday Trading in brief


Intraday Trading refers to a single day trading in a stock market in which shares are purchased and sold in a single day with an objective to earn profits from the price fluctuations at a given point of time during the operation of the stock market.

In Intraday Trading:

  • Shares are traded in a single day.

  • All the intraday shares are squared off at the end of the day, even if the desired price has not been achieved.

  • The trader does not take the actual delivery of shares.

  • Here, the Intention of the trader is not to Invest but to earn profit from fluctuation in Prices


Intraday Trading under Income Tax
Income Tax treatment for Speculative Income

  • Intraday Trading is considered as SPECULATION BUSINESS under Income Tax, where there is no actual delivery of shares (As per section 43(5) of the Income Tax Act).

  • Profit from Intraday Trading will be considered as Speculation Gain and Loss from Intraday Trading will be considered as Speculation Loss.

  • Results of Intraday Trading i.e Profit or Loss is chargeable to tax under the head "Profits & Gains from Business or Profession" and is chargeable as business income.