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I'm learning about the trading process on India stock exchanges BSE/NSE. I came to know there are lots of taxes like Securities Transaction Tax (STT), Stamp Duty, Turn-over tax, GST apart from the Brokerage to be paid to broker. Are these all of the taxes or is there any additional taxes over these?

  1. Is there any "Income tax" to be paid for shares bought/holding shares?
  2. Will the money received from selling shares fall under "Taxable money for FY Income tax"?
  3. Will the "Dividend/Bonus/Buy-back" money fall under taxable category?
  4. Will the share-holder pay "Dividend Distribution Tax"?
  5. What is "Capital Gains"?
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Are these all of the taxes or is there any additional taxes over these?

Turn-over tax is not for retail investors. Other taxes are paid by the broker as part of transaction and one need not worry too much about it.

Is there any "Income tax" to be paid for shares bought/holding shares?

No for just buying and holding. However if you buy and sell; there would be a capital gain or loss. In stocks, if you hold a security for less than 1 year and sell it; it is classified as short term capital gain and taxes at special rate of 15%. The loss can be adjusted against any other short term gain. If held for more than year it is long term capital gain. For stock market, the tax is zero, you can't adjust long term losses in stock markets.

Will the money received from selling shares fall under "Taxable money for FY Income tax"?

Only the gain [or loss] will be tread as income not the complete sale value. To calculate gain, one need to arrive a purchase price which is price of stock + Brokerage + STT + all other taxes. Similar the sale price will be Sales of stock - Brokerage - STT - all other taxes. The difference is the gain.

Will the "Dividend/Bonus/Buy-back" money fall under taxable category?

Dividend is tax free to individual as the company has already paid dividend distribution tax. Bonus is tax free event as it does not create any additional value. Buy-Back is treated as sale of shares if you have participated.

Will the share-holder pay "Dividend Distribution Tax"?

Paid by the company.

What is "Capital Gains"?

Profit or loss of buying and selling a particular security.

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