I would like to put in a few points here :
So far as LTCG is concerned…
- Keep a separate demat account for your long term investments where you intend to hold the shares for more than 12 months.
- Please take care to see that these shares are reflected as investments in your balance sheet
- Take care that you have not acquired these shares out of borrowed funds.
In case you want to claim STCG , the basic criteria is that you should have some regular source of income apart from dealing in shares. Besides the frequency of trades, holding period and whether you have used borrowed funds too shall be considered by the assessing officer to determine whether to treat it as business income. In case your major source of income is from shares and the frequency of trades is very high then the officer can hold the view that it is your business and tax it accordingly.