Trading & Taxation
Trading:
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Allocate funds from your NRE/NRO bank account to your PIS.
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The bank now informs the brokerage firm on how much funds you have allocated. This is then updated on your trading account.
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When you make a stock purchase, the brokerage firm sends the buy contract note at the end of the day to the bank. The bank in turn debits your PIS account to that extent and credits the brokerage firm.
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Similarly when you sell some stocks from your demat, the brokerage firm sends a sell contract note at the end of the day to the bank and also credits your PIS bank account with the proceeds from the sale.
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Note that two separate contract notes are sent for all your buy transactions and sell transactions at the end of every day. The net amount credited/debited to your PIS will be including all charges that appear on the contract note.
Taxation:
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Financial year ending in India: March 31st
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Last date for filing IT returns: March 31st
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Short term capital gains: There is a 15% tax on short-term capital gains that fall under Section 111A of the Income Tax Act. This includes equity shares, equity-oriented mutual-funds, and units of business trust, sold on or after October 1, 2004 on a recognised stock exchange, and falling under the securities transaction tax (STT).
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Long term capital gains: According to the new reform, all the capital gains that are more than Rs.1 lakh in amount will be charged at 12.5% tax rate while the exemption limit was raised to Rs. 1.25 lakh. However, the gains made on and before 31st January 2018 will be exempted from this new rule.