For example I have made 5 Lakh Rupees in this financial year in the form of Profits by intraday and swing trading. If I choose to invest these amount(5 lakh Profit) in to some XYZ stock for purely holding purposes. How is tax calculated in this case.
Note: I am not withdrawing single rupee from my Trading Account, I am only reinvesting my Profits.
The taxation is not based on your money moving in your trading account. It is based on the profits you make. First, you have to pay tax for the 5 lakh profit you made from trading treated as Short-term capital gains/ Business income.
Later, if you invest these profits into a stock and hold it for more than a year, you won’t be paying any additional tax on the Long Term Capital Gains earned.
Hope it’s clear.
It’s Clear. Are there any valid LEGAL ways to evade tax ?
Yes!
Start a company 
… apoint you family members as your employees and give salary to them. Show always loss in Company. 
Sounds, good… My wife is going to make more money than me then… Thanks.
Tax is on the earning ( Income after Expenses). If you have made a 5 lac in trading and then investment for long term is application of earning. You will have to still pay tax on earnings you have made.