You need to disclose the gains or losses you make through equity market trading under capital gains while filing your income tax return (ITR). However, the gains/losses are treated as capital gains only if your money remains in the equity market for at least a day. Gains/losses incurred on intraday trading are, however, not treated as capital gains, and needs to be disclosed in the ITR differently. Since the intent of intraday trading is not to take delivery, it is classified as speculative trades. While the tax rate still remains the same as short-term capital gains (that is the peak rate of tax), these speculative losses that arise can only be set off against speculative gains. They cannot be set off against STCG or against LTCG or against any heads of income.
Buying and selling of stocks within the same trading day are known as intraday trading. Typically, in such cases, the intention of the investor is not to invest for the long term based on the growth prospects of a company, but making gains based on the volatility of shares on a particular day. The Income Tax Act looks at the intent of the trader in such cases. When you trade intraday, there is clearly no intent to take delivery and that means you are not creating an asset. Since capital gains can only arise from asset and no asset is created in intraday trading, it is treated as a separate under Speculative income.