Buy or sell shares in stock market

How to buy shares in Indian Stock Market?

Simple steps to buy or sell shares in Indian Stock Market.

Prerequisites

1. You need to have a DEMAT and Trading account – Contact any banks or stock brokers such as IndiaBulls, India Infoline , Reliance Money etc.
2. You need to have a PAN number. – Check out my earlier blog on PAN.
3. You need to have a Bank account, preferably in the same city and with online transaction facility which makes life easier.

Steps

1. Once you have a DEMAT or Trading account, you will be given an online access for buying or selling shares.
2. Select the stock or shares of the company you want to buy.
3. Decide on price and quantity of the shares.
4. Transfer money or allocate money to your trading account from your bank account sufficient enough to buy the shares and pay for additional charges such as brokerage, commissions and any other charges.
5. Using online account , put an order to buy the shares. This will be an easy process as you can check current market price – share value of the company and send the order to stock market using simple user interface.
6. Once ordering is done, you will receive a confirmation of your order and once your share is bought, you will get a confirmation of your trade.
7. After a couple of days, the share will be credited to your account.
8. If you want to sell, you can use same online account and specify the number of shares you want to sell and put the order.
9. Once the order is executed, you will get an online confirmation for this and amount will be credited back to your account within 2-3 days.
10. You can transfer money back to your bank account or use the money to buy some other shares.

Tax implication

If you are transacting in stock market, and if are buying and selling a particular share within an year, you need to pay 10% of your profit as a capital gain tax. If the interval between buying and selling is more than one year, you need not pay any taxes. The dividend obtained from the shares does not attract any tax. If there are any losses in a year, you can deduct the amount from any other capital gains (only) when calculating your taxes!!

Happy Investing ……….
Vinay