Is Trading Legal or Not?
While finding out what our calling is, we should always try something new. However, in spite of the fact that a new occupation may involve quite strongly, it is necessary to understand whether it is legal or not.
This is especially important when it comes to lucrative hobbies. For example, an experienced trader can earn thousands of dollars making correct predictions about changes in oil prices, currencies, gold and other valuable assets. This is why trading is even compared to gambling.
But is it really a gambling game? And is trading legal in India? We studied the laws of the country and came to a clear conclusion. But first things first.
Trading is not a gambling game
If you decide to learn more about trading in financial markets, you should immediately understand that trading is not a game of chance. People do not trade for pleasure or excitement, but for analyzing the price movements and making profitable deals.
By and large, it is a merchandise trade when the goods are bought at a lower price and sold at a higher one. The difference is that the trade is carried out not over the counter, but over the terminal.
A trader is a skilled person who is able to predict prices. He uses not his intuition, but special tools like various indicators, technical analysis patterns and many other methods. This is what you can learn on the Olymp Trade trading platform for free.
Anyone can learn popular trading strategies from the very beginning and test their effectiveness on a demo account. There is no need to deposit one’s own funds.
Law and trading
Taking part in trading financial assets is not prohibited in any developed country. If you want to increase your savings, just do it. The main thing is to choose a credible broker that will provide a comfortable trading environment.
It does not matter what kind of trades you prefer. Even if you decide to focus on short trades, it will not be betting.
However, please pay attention to the main condition. A certificate must confirm the credibility of a trading platform.
The Olymp Trade platform was certified by the International Finance Commission in 2016, which indicates high quality standards of the company. In addition, the quality of the execution the broker is providing is confirmed by an independent authoritative reputable service Verify My Trade.
Taxes and trading in India
A citizen must pay taxes on the profit he or she gains in all civilized countries. Unfortunately, the funds obtained through trading, are also subject to tax. On the other hand, this confirms the legality of this way to earn income.
To begin with, the tax rate depends on your trading style. Legislation measures the investment income in proportion to the type of trade you make.
If you hold securities and other assets for more than 1 year, you will not have to pay profit tax. This is what Section 10 (38) of the Income Tax Act of 1961 tells us. Note that long-term investments in commercial companies do not have such a benefit.
The profit you make on a trade, which is longer than 1 day, but shorter than 365 days, will be a subject to a 15% tax. Compared to the tariffs in other countries, trading in India is a real tax fairy-tale.
Fast trades that open and close within 1 day are classified by lawmakers as speculative activities. According to section 43 (5) of the Income Tax Act, the fee will depend on the total annual earnings. For example, if you earn 500.000 rupees in one year, you will have to pay 10% tax.
What to begin with
Any trader begins with creating a trading account. At Olymp Trade, this will not take you longer than 2-3 minutes. After that, you will find yourself on a platform with an activated demo account. Make your first trade without any risk right now.