Stock transactions generally involve two different types of tax, Capital Gains Tax and Securities Transaction Tax.
Capital Gains Tax is levied if and when you sell stocks at a profit. (Gain further capital on your investment) Depending on the time for which you hold on to these stocks, this tax can be Short-Term Capital Gains (STCG) Tax or Long-Term Capital Gains (LTCG) Tax. Profits made by selling off stocks within 1 year incur STCG Tax which is charged at 15% of the profit, while the profit on selling stocks after a year’s holding are termed as LTCG and are levied at 10% on any profit exceeding ₹1 lac.
Securities Transaction Tax is applicable upon stocks as and when they are traded on the stock exchange. It is levied across both Buy and Sell transactions for delivery trades at 0.1% of the transaction value and only upon the sale of intraday trades at 0.025% of the transaction value.