How are Gains from Intraday Trading Taxed for ITR

Published on December 18, 2025 | 3 min read

Tax rules applicable to intraday trading are different and complicated compared to tax on capital asset gains. Intraday trading gains is considered a speculative business income under section 43(5) of the Income Tax Act, hence your intraday income is taxed under ‘Profit and Gain From Business or Profession’. In intraday trading, you get taxed on your trading turnover, which includes both gains and losses from your trades.

Let’s understand in detail how gains on intraday trading are taxed in India.

What is Intraday Trading?

When traders buy and sell shares within a single trading day, it is considered ‘Intraday Trading’. Unlike investors, traders seek to earn profit from short-term price movements in the market instead of owning the shares. The profits earned from intraday trading are taxable at your applicable tax rate.

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Income Tax Rules On Intraday Trading

Intraday trading gains come under ‘Profits from Business and Profession and will be considered as speculative business income because you trade without the intention of taking delivery of the securities.

Since intraday trading is a business income, you need to file ITR-3 and prepare your financial statements. The ITR due date for intraday trading income differs based on whether a tax audit applies to you or not.

When is Tax Audit Applicable to Intraday Trading?

Tax audit applies to your intraday trading business if it meets the following criteria.

If your profits are less than 6% of your trading turnover.
If your total trading income is more than the basic exemption limit.
If your trading income is less than ₹1 crore.

Tax Calculation For Intraday Trading

Tax applicable on intraday trading income is calculated at your respective slab rates. The following are the slab rates for different income levels under the Old and New Tax Regime.

Tax Applicable as per Old Tax Regime

Old Tax Regime Slabs	Tax Rate
Up to ₹2.5 lakhs	0%
₹2.5 lakhs – ₹5 lakhs	5%
₹5 lakhs – ₹10 lakhs	20%
Above ₹10 lakhs	30%

Tax Applicable as per New Tax Regime:

New Tax Regime Slabs	Tax Rate
Up to ₹4 lakhs	Nil
₹4 lakhs – ₹8 lakhs	5%
₹8 lakhs – ₹12 lakhs	10%
₹12 lakhs – ₹16 lakhs	15%
₹16 lakhs – ₹20 lakhs	20%
₹20 lakhs – ₹24 lakhs	25%
Above ₹24 lakhs	30%

Note: The above tax rates will be increased by 4% cess and the surcharge rate applicable.

What Is Advance Tax For Intraday Trading?

Advance tax is an additional amount you have to pay if the tax payable on your intraday trading income exceeds ₹10,000. Advance tax differs based on whether the trader opted for presumptive taxation under Section 44AD of the Income Tax Act or not.

If you don’t opt for Presumptive Taxation, you get to pay your advance tax in four instalments within a 30-day interval. However, if you do opt for Presumptive Taxation, you must pay the advance tax applicable in a single instalment.

Understanding how your intraday trading gains are taxed can help you accurately calculate your Net Profits. Knowing your applicable income tax slab is essential as it will help reduce your tax liability by deducting brokerage and GST expenses and setting off losses against speculative gains.

About Author

Mariyam Sara

Sub-Editor

holds an MBA in Finance and is a true Finance Fanatic. She writes extensively on all things finance whether it’s stock trading, personal finance, or insurance, chances are she’s covered it. When she’s not writing, she’s busy pursuing NISM certifications, experimenting with new baking recipes.

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About Upstox

Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.