Taxes play a crucial role in shaping net returns from trading and investing. In India, taxation differs based on the type of income: long-term capital gains (LTCG), short-term capital gains (STCG), business income, or speculative income. For listed equity shares held for more than 12 months, LTCG above ₹1 lakh is taxed at 10% without indexation. STCG (for holdings less than 12 months) is taxed at 15%. Intraday equity trades are classified as speculative income and taxed at slab rates. Futures and options are treated as business income and taxed accordingly. Taxpayers can claim expenses related to trading — such as brokerage, subscriptions, and research tools — against their business income. Correct categorization is crucial to avoid penalties. Record keeping of all transactions, contracts, and invoices is mandatory for accurate reporting. Understanding tax implications helps traders plan exits, reinvestments, and filings better. Consulting a tax advisor ensures compliance while maximizing allowable deductions.