Budget 2025: These days, people's interest in the stock market is increasing rapidly. In the old tax regime, there was a benefit of saving tax by investing, but now this facility is not available in the new tax regime. In such a situation, people have started investing money in different places.

In this year's budget, Finance Minister Nirmala Sitaraman has announced that income up to Rs 12 lakh will be tax-free, but capital gains will not be included in it. Keep in mind that income from the stock market also comes under capital gain. So let's understand how much and how tax will have to be paid on the income from the stock market.

First, understand the income tax rules.

According to the income tax, the income of any person is kept in 5 categories-

Income from salary

Income from house property

Income from business or profession

Income from capital gains

Income from other sources

In which category does the income from the stock market fall?

If you invest in the stock market, then your income will either come under the tax purview as capital gains or in 'income from other sources'. The income from buying and selling shares is considered capital gain.

What are long-term and short-term capital gains?

If you sell the shares after keeping them in the portfolio for at least 1 year, then the profit you get from it is called a long-term capital gain. On the other hand, if you sell the shares before 1 year, then it is called a short-term capital gain.

What about the income from dividends?

Income from dividends comes under the category of other sources. That is, it is considered that you have got it from other sources. Tax on this will also be levied according to your tax slab.

How much tax on which type of income?

Different types of income are taxed in different ways. Let us know about them.

Long Term Capital Gain (LTCG) Tax

Income from long-term capital gain is tax-free up to Rs 1.25 lakh. At the same time, you will have to pay a flat 12.5% tax on the income after this. Let us tell you that till last year, income up to Rs 1 lakh was tax-free, and 10 percent tax was levied on income above that.

Short Term Capital Gain (STCG) Tax

A flat tax of 20% will be levied on income from short-term capital gains. Earlier, it used to be 15 percent, which has increased from this year. There is no tax exemption for any limit in this.

Tax on income from other sources
If you do intraday trading or earn from dividends, then it will be considered as 'income from other sources'. Tax on this will be levied according to your income tax slab. That is, if you fall in the 10 percent slab, then you will pay 10 percent tax and if you fall in the 30 percent slab, then you will be taxed at 30 percent. If the dividend is more than Rs 5,000, then the broker or mutual fund company will deduct 10% TDS in advance. You can adjust this TDS while filing ITR.

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