If I earn a profit through a company and invest it in the share market, will I have to pay tax on it?
Stock market earnings are taxed. The tax implications depend on your place of residence, the length of time you held the investment, and the type of profits.
Two common stock market profit taxes are:
Capital Gains Tax: A capital gain occurs when you sell a stock for more than you paid for it. This tax may vary by stock holding period. Short-term and long-term capital gains are taxed differently in several nations, including the US. Long-term capital gains are taxed less to stimulate investment.
Dividend Tax: Income tax applies to dividends from equities you own. Some nations tax qualifying dividends at a lower rate like long-term capital gains, while others tax it as regular income.
Deductions, tax credits, and exemptions may apply to your position under these complicated tax regulations. Retirement accounts have various tax laws. To understand your investments’ tax consequences, consult a tax specialist or financial counselor.