Income Tax Filing for Equity, Intraday and F&O Traders

Understand Due Dates, ITR Form to file, Taxability, Treatment of Loss
for Equity & Mutual Fund, Intraday, F&O and Debt Traders.

Income Tax Filing For Equity & Equity Mutual Funds

While Income Tax Filing for Equity Shares or Equity Mutual Funds is treated as Capital Gains or a Non-Speculative Business Income, based on the intention of trading and how it was treated in previous years.

Taxability

Long Term Capital Gains	Upto INR 1 lac	Exempt
Long Term Capital Gains	More than INR 1 lac	10%
Short Term Capital Gains	Any amount	15%

Treatment of Loss

Loss can be carried forward for 8 years
STCL can be set off against LTCG and STCG
LTCL can be set off against LTCG only

ITR Form

ITR-2 i.e. ITR Form to report capital gains income from sale of equity shares and equity mutual funds. In case trading in equity shares and mutual funds is treated as business income, ITR 3 should be filed.

Due Date to file ITR

On or before 31st July of the Assessment Year

Taxability

Equity Intraday Income is taxable at slab rates as per Income Tax Act

Treatment of Loss

Loss can be carried forward for 4 years
Loss can be set off against speculative business income only

Applicability of Tax Audit

If Turnover is up to Rs. 2 Cr, profits are less than 6% of turnover, total income exceeds the basic exemption limit, and taxpayer breaks 5-year rule u/s 44AD
If Turnover is between Rs. 2 Cr and Rs. 10 Cr, profits are less than 6% of turnover and total income exceeds the basic exemption limit
If Turnover exceeds Rs. 10 Cr

Calculation of Turnover

Absolute Profit i.e. sum of positive and negative differences

ITR Form

ITR-3 if trader does not opt for presumptive taxation scheme
ITR-4 if trader opts for presumptive taxation scheme

Due Date to file ITR

If Tax Audit is not applicable - On or before 31st July of the Assessment Year
If Tax Audit is applicable -
- On or before 30th September of the Assessment Year to submit the Tax Audit Report
- On or before 31st October of the Assessment Year to File ITR

Income Tax Filing For Equity Intraday

While Income Tax Filing for Equity Intraday Income it is treated as a Speculative Business Income, since there is no delivery of shares at the end of the trade

Income Tax Filing For F&O Trading of Equity, Commodity & Currency

While Income Tax Filing for F&O Trading of Equity, Commodity and Currency are treated as Non-Speculative business income, since the intention is hedging and there is delivery of the underlying contract.

Taxability

Income from F&O Trading is taxable at slab rates as per Income Tax Act

Treatment of Loss

Loss can be carried forward for 8 years
Loss can be set off in the current year against any income except salary
Loss can be set off in the future years against business income only (speculative + non-speculative)

Applicability of Tax Audit

If Turnover is upto Rs. 2 Cr, profits are less than 6% of turnover, total income exceeds the basic exemption limit, and taxpayer breaks 5-year rule u/s 44AD
If Turnover is between Rs. 2 Cr and Rs. 10 Cr, profits are less than 6% of turnover and total income exceeds the basic exemption limit
If Turnover exceeds Rs. 10 Cr

Calculation of Turnover

Futures - Absolute Profit i.e. sum of positive and negative differences
Options - Absolute Profit + Premium on sale of options

ITR Form

ITR-3 if trader does not opt for presumptive taxation scheme
ITR-4 if trader opts for presumptive taxation scheme

Due Date to file ITR

If Tax Audit is not applicable - On or before 31st July of the Assessment Year
If Tax Audit is applicable -
- On or before 30th September of the Assessment Year to submit the Tax Audit Report
- On or before 31st October of the Assessment Year to File ITR

Taxability

Long Term Capital Gains	20%
Short Term Capital Gains	Slab Rate

Treatment of Loss

Loss can be carried forward for 8 years
STCL can be set off against LTCG and STCG
LTCL can be set off against LTCG only

ITR Form

ITR-2 i.e. ITR Form to report capital gains income from sale of debt mutual funds, debentures, bonds, etc. In case trading in debt instruments are treated as business income, ITR 3 should be filed.

Due Date to file ITR

On or before 31st July of the Assessment Year

Income Tax Filing For Bonds and Debentures

While Income Tax Filing Debt instruments such as Debt Mutual Funds, Debenture, Bonds, etc. are treated as Capital Gains or a Non-Speculative Business Income, based on the intention of trading and how it was treated in previous years.

Income Tax Filing for Equity, Intraday and F&O Traders

Understand Due Dates, ITR Form to file, Taxability, Treatment of Loss for Equity & Mutual Fund, Intraday, F&O and Debt Traders.

Income Tax Filing For Equity & Equity Mutual Funds

Taxability

Long Term Capital Gains	Upto INR 1 lac	Exempt
Long Term Capital Gains	More than INR 1 lac	10%
Short Term Capital Gains	Any amount	15%

Treatment of Loss

Loss can be carried forward for 8 years
STCL can be set off against LTCG and STCG
LTCL can be set off against LTCG only

ITR Form

Due Date to file ITR

On or before 31st July of the Assessment Year

Income Tax Filing For Equity Intraday

While Income Tax Filing for Equity Intraday Income it is treated as a Speculative Business Income, since there is no delivery of shares at the end of the trade

Taxability

Equity Intraday Income is taxable at slab rates as per Income Tax Act

Treatment of Loss

Loss can be carried forward for 4 years
Loss can be set off against speculative business income only

Applicability of Tax Audit

If Turnover is up to Rs. 2 Cr, profits are less than 6% of turnover, total income exceeds the basic exemption limit, and taxpayer breaks 5-year rule u/s 44AD
If Turnover is between Rs. 2 Cr and Rs. 10 Cr, profits are less than 6% of turnover and total income exceeds the basic exemption limit
If Turnover exceeds Rs. 10 Cr

Calculation of Turnover

Absolute Profit i.e. sum of positive and negative differences

ITR Form

ITR-3 if trader does not opt for presumptive taxation scheme
ITR-4 if trader opts for presumptive taxation scheme

Due Date to file ITR

If Tax Audit is not applicable - On or before 31st July of the Assessment Year
If Tax Audit is applicable -
- On or before 30th September of the Assessment Year to submit the Tax Audit Report
- On or before 31st October of the Assessment Year to File ITR

Income Tax Filing For F&O Trading of Equity, Commodity & Currency

Taxability

Income from F&O Trading is taxable at slab rates as per Income Tax Act

Treatment of Loss

Loss can be carried forward for 8 years
Loss can be set off in the current year against any income except salary
Loss can be set off in the future years against business income only (speculative + non-speculative)

Applicability of Tax Audit

If Turnover is up to Rs. 2 Cr, profits are less than 6% of turnover, total income exceeds the basic exemption limit, and taxpayer breaks 5-year rule u/s 44AD
If Turnover is between Rs. 2 Cr and Rs. 10 Cr, profits are less than 6% of turnover and total income exceeds the basic exemption limit
If Turnover exceeds Rs. 10 Cr

Calculation of Turnover

Futures - Absolute Profit i.e. sum of positive and negative differences
Options - Absolute Profit + Premium on sale of options

ITR Form

ITR-3 if trader does not opt for presumptive taxation scheme
ITR-4 if trader opts for presumptive taxation scheme

Due Date to file ITR

If Tax Audit is not applicable - On or before 31st July of the Assessment Year
If Tax Audit is applicable -
- On or before 30th September of the Assessment Year to submit the Tax Audit Report
- On or before 31st October of the Assessment Year to File ITR

Income Tax Filing For Bonds and Debentures

Taxability

Long Term Capital Gains	20%
Short Term Capital Gains	Slab Rate

Treatment of Loss

Loss can be carried forward for 8 years
STCL can be set off against LTCG and STCG
LTCL can be set off against LTCG only

ITR Form

ITR-2 i.e. ITR Form to report capital gains income from sale of debt mutual funds, debentures, bonds, etc. In case trading in debt instruments are treated as business income, ITR 3 should be filed.

Due Date to file ITR

On or before 31st July of the Assessment Year