I wish to know two things about taxable income: first, are profits from an ELSS scheme after the 3-year lock-in included in the income? When trading intra-day stocks, what is the rate at which the profits are taxed?
The ELSS schemes fall under the EEE (exempt-exempt-exempt) tax regime. This means tax is exempt on the investment under Section 80C up to Rs 1 lakh, the gains on the investment during the lock-in is exempt from tax and on redemption, of the mandatory 3-year lock-in, the redeemed sum is also tax free. In intraday stock trading, if one takes delivery and sells; he pays STT and the transaction gains are treated as capital gains and taxed @ 15 per cent. If one does not take the delivery, one pays no STT. However, gains from day trading is treated as speculative income and will be taxed as income from business and depend on the tax slab the trader falls in. Unlike short-term losses in stocks, intra-day trading losses as these speculative losses can be carried forward for only four years.