Intraday vs delivery Trade in terms of Taxes.
                     Intraday vs 
delivery Trade 
in terms of 
Taxes
INTRODUCTION
• The distinction between intraday 
and delivery trading is that intraday 
trading is buying and selling shares 
during a single trading day and 
your exchange becomes a delivery 
trade because you do not square 
off your position. 
• For intraday and delivery-based 
dealing, techniques vary.
Source: www.fincash.com
INTRADAY TRADES
• Within a trading day, i.e. on the 
same day, intraday trades 
require buying and selling a 
stock. 
• Under such brokerage schemes, 
if you do not square your position 
by the end of the day, your 
shares will be sold automatically 
at the day's closing price. 
• So confirm Automatic Squaring 
Off with your broker.
Source: www.kotaksecurities.com
HOW IT WORKS?
• By setting a price target for a 
stock and purchasing it if it is 
trading below your target, 
several traders start an intraday 
trade; they then sell the stock 
until it hits the target. 
• Or if they fear that before the 
market closes for the day the 
stock will not meet the target, 
the intraday traders sell it at the 
best price possible.
Source: www.kotaksecurities.com
ADVANTAGES OF 
INTRADAY TRADES
• Low Capital: When taking 
positions, intraday traders also 
use margin funds. This way, 
though paying just a small sum 
upfront, they get to put a greater 
trade. 
• Strong liquidity: Dependent on 
price volatility, the small timeline 
often helps traders to book gains 
easily. 
Source: www.financialexpress.com
ADVANTAGES OF INTRADAY 
TRADES
CONT.
• Low brokerage: Traders typically 
bill intraday trades for smaller 
fees relative to distribution 
trading. 
• No overnight risk: trades are 
squared off here before the close 
of the market. 
Source: www.kotaksecurities.com
DISADVANTAGES OF 
INTRADAY TRADES
• Loss risk: The trader could suffer 
losses if the stock shifts 
adversely during the trading day. 
• Constant monitoring: One must 
closely watch market fluctuations 
to gain as an intraday trader. 
• No corporate benefits: No stocks 
are delivered by intraday dealers. 
Source: www.businessinsider.com
DELIVERY TRADES
• The stocks you buy are added to 
your account in distribution 
transactions. 
• When you wish to sell them, they 
will remain in your hands, which 
could be in days, weeks, months 
or years. 
• You enjoy absolute control of the 
stocks.
Source: www.kotaksecurities.com
ADVANTAGES OF 
DELIVERY TRADES
• No time limit: For as long as they 
want, distribution traders are 
able to hang on to stocks. 
• Losses are limited: Traders pay 
the entire value of the stock up 
front when acquiring shares for 
distribution. 
• Corporate Benefits: Traders 
become part-owners of the 
company after taking delivery of 
shares. 
Source: www.livemint.com
DISADVANTAGES OF 
DELIVERY TRADES
• Low liquidity: Distribution traders 
are losing out on margin 
financing benefits. 
• No leverage: In their deals, 
distribution traders are 
constrained by the amount of 
money they currently have. 
Source: www.economictimes.com
HOW APPROACH 
DIFFER FOR INTRADAY 
AND DELIVERY TRADES
• Trading Volumes: 
• For intraday trades, experts 
advocate sticking to larger stocks. 
• As a key intraday trade measure, 
analysts still use trading volumes. 
• Price levels: 
• Setting pricing targets and 
avoiding losses allows to make the 
best of these possibilities.
Source: www.kotaksecurities.com