In our country, traders and investors are obligated and treated differently in terms of taxation. A trader needs to declare as business income all amount of income from her/his short term equity trades. He has to pay tax accordingly too which can be as high as 30% in some cases. While for an investor, the income from short term equities is considered as capital gain and hence only a tax of 15% needs to be paid on the profits. Now, coming to the question, if one is trading F&O on a recognized stock exchange, then certainly you are to declare yourself of being a trader as per the rules. Equity trading, for both short term and long term, will be considered as Business Trading and the taxation will be as per the rules set for F&O. But if you are a salaried person or have some other business income as your main income source then you could show your equity profits as capital gains and hence exploit the perks of being an investor. Thus, when trading F&O, if you’re doing frequent short-term equity then you have the chances of being exempt from taxes. The same is done by declaring your long term profits as long-term capital gains though you have declared yourself as a trader. Thus, in this case, you are both a trader as well as an investor at the same time. Though, profits from selling stock held for 12 months or lesser will be termed as business transaction/income and taxed accordingly.