PaisaTrade logo
PaisaTrade.in
LEARN·UNDERSTAND·PRACTICE
Join Free

Beginner English · HinglishFree

Tax Basics

How gains, dividends and trading income are taxed, and how to file correctly.

Start this course free Log in
%
6
Lessons
3
Chapters
4
Diagrams
42
Practice questions
1 hr
Time

What you'll be able to do

  • Tell short-term and long-term gains apart
  • Know how dividends and F&O income are taxed
  • Use deductions you are allowed
  • Choose the right ITR form

Course syllabus

Every lesson has worked examples, diagrams, key terms, common mistakes and a practice check.

  1. 1

    Chapter 1

    Tax on gains and dividends

    • STCG and LTCG on Shares 10 min

      Selling shares at a profit creates a capital gain. How long you held them decides the rate.

    • How Dividends Are Taxed 9 min

      Dividends feel like free money, but they are taxed at your slab rate, and sometimes cut before they reach you.

  2. 2

    Chapter 2

    Deductions and trading income

    • Deductions: Section 123 (old 80C) and ELSS 10 min

      The popular ₹1.5 lakh deduction now sits in Section 123 of the new Act. It still helps only in the old regime.

    • How F&O and Intraday Income Is Taxed 10 min

      Trading profits are not capital gains. F&O is business income, intraday is speculative, and both change how you file.

  3. 3

    Chapter 3

    Filing and planning

    • Filing ITR-2 for Capital Gains 10 min

      If you sold shares or funds but have no business income, ITR-2 is usually your form. Here is the flow, step by step.

    • Tax-Loss and Gain Harvesting 11 min

      Losses are not wasted: booked properly, they cut tax on gains. And the ₹1.25 lakh exemption can be used every year.

A look inside: “STCG and LTCG on Shares”

In this lesson you will

  • Tell short-term from long-term gains on listed shares
  • Apply the 20% and 12.5% rates
  • Use the ₹1.25 lakh yearly exemption
Holding period decides the tax
Timeline split at 12 months into short-term and long-term12 monthsBuyShort-term gainLong-term gain20%12.5% above ₹1.25 L a year

For listed shares and equity funds: sell within 12 months and the gain is short-term, taxed at 20%. Hold longer and it is long-term, taxed at 12.5% on gains above ₹1.25 lakh in a year (rates as of 2026).

Capital gain
Profit from selling an asset for more than its cost.
STCG
Short-term capital gain: listed shares held 12 months or less; 20%.
LTCG
Long-term capital gain: held over 12 months; 12.5% above ₹1.25 lakh.
FIFO
First in, first out: the oldest shares are treated as sold first.