Active trading? Gain is business income

● I trade in securities and also maintain books of accounts. Will the profit be a business income or capital gain? ―R.L. Saroj
Under the Income Tax Act, 1961, the classification of income from trading in securities depends on the nature of the transactions and the intention behind them.

- Chirag Nangia

● I trade in securities and also maintain books of accounts. Will the profit be a business income or capital gain? ―R.L. Saroj
Under the Income Tax Act, 1961, the classification of income from trading in securities depends on the nature of the transactions and the intention behind them. If you frequently trade in securities, maintain books of accounts, and your primary intention is to earn profits through active buying and selling, your income will typically be classified as business income.

If the intention is to hold securities as investments for the purpose of long-term appreciation or earning dividends, the income will be treated as capital gains. This can be further classified as: