When is Intraday Profit Credited?
From March 01, 2021, the Securities and Exchange Board of India (SEBI) released a new guideline for the credit of intraday trading profit.
In intraday trading, you can make multiple trades within a trading day but have to square off your positions before the end of the day. This means that when you select intraday trading as the order type, you have to sell the shares that you have bought on the same day and vice versa.
So, if you have purchased 50 shares of a company via 3 different intraday orders, then you need to sell all 50 before the end of the trading day. On the other hand, if you short sell 50 shares of a company, then you need to buy them before the end of the day. If you profit, the amount is credited to your account, and if you book a loss, then you are liable to pay the broker.
The new SEBI guideline defines the time when intraday trading profit can be credited to you. Here are the details.
New Guidelines for the Credit of Intraday Trading Profit
From March 01, 2021, SEBI has mandated that any intraday trading profit gained by a trader on a trading day will be unblocked for use in the trading account only on the next trading day after 3:30 PM. Therefore, traders will not be able to use their intraday trading profit on the same day. You will have access to these funds only after the end of the day of the next trading day.
To understand this, let’s use an example:
Let’s say that you use your trading account online and enter the following trades on September 20, 2021:
- BUY: 2000 shares of ABC Limited at ₹10 per share. So, you buy shares worth ₹20,000
- BUY: 500 shares of ABC Limited at ₹12 per share. So, you buy shares worth ₹6,000
- SELL: 2500 shares of ABC Limited at ₹16 per share. So, you sell shares for ₹40,000
Therefore, you purchased 2500 shares of ABC Limited for a total buying price of ₹26,000 using your trading account online. On the same day, you sell all the shares for ₹40,000 via your trading account and book a profit of ₹14,000 on the trade.
Here are three scenarios describing when the intraday trading profit will be made available to you for use:
- Intraday Trading Day (T) and T+1 are working days If T and T+1 are working days, then the profits will be unblocked on T+1, i.e., September 21, 2021, after 3:30 PM.
- T is a Friday For intraday trading profit earned on a Friday, the credit will be unblocked in your trading account on Monday after 3:30 PM, provided it is a working day.
- T+1 is a non-working day In any case, if (T+1) is a holiday, then the profit will be unblocked in your trading account at 3:30 PM on the next working day.
Also Read: Best time frame for Intraday Trading
As a trader, it is important to make a note of this policy since it can impact the number of trades you might be able to make using your trading account online.
Earlier, intraday profits were credited immediately for use by most brokers. While the new policy has been out for nearly six months, many traders are still unaware of the same. Before you take an intraday position using your trading account online, ensure that you factor in the fact that any profits will be made available to you only after 3:30 PM on the next trading day.
This is different from what many traders were accustomed to, as they would trade using profits made on trades on the same day. With the new rule, this will not be possible, and you will have to wait until the end of the next trading day for the profits to be available for use.
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Frequently Asked Questions
There is no fixed amount to start day trading online in India. It depends on your budget and risk appetite. However, it is crucial to choose a good broker for your trading needs.
If you have made a profit in intraday trades today, then you will receive the funds after 3:30 PM tomorrow, provided tomorrow is a working day. If there is a holiday tomorrow, then the profit will be credited after 3:30 PM on the next working day.
No. As per SEBI’s guidelines, the intraday profit earned by you today will be credited to your account after 3:30 PM on the next working day. You will be able to use it only after it is credited.
As per the guidelines issued by SEBI, from March 01, 2021, profit made from an intraday trade is unblocked after 3:30 PM on the next trading day. If you have made profits today, then you should check your trading account online after 3:30 PM on the next working day