We naturally do not think about both the terms investing and trading at a time. Or atleast people who are not experienced in the field of business.
Trading means buying goods and selling. So it is mostly business. But Investing is looking for the growth of assets.
Both are same if we look from short term perspective. But on the long run trading is a business and investing is not so. The tax structure for both is not same.
Tax for the profits made in trading (or investments of short term) is similar to that for profits made from business. This is higher compared to the tax for profits made from investing. There are no taxes for investments which are longer than a year. This rule is going to be changed in many countries.
Investments involve buying/selling assets and holding them for the long term. The assets can be depreciating in nature or appreciating.
In the share market trading refers to buying and selling of share in a duration of less than a month. Where as investments range from more than a month till the shares are sold. If the shares are held for more than a year then taxes are null on the returns. This ideas is particularly useful for those who earn money regularly and invest regularly for the long term. For the short term investors (traders) it is very important to consider the effects of tax before doing business.
