5.1 – Quick Recap

Reiterating from the previous chapter –

You can classify yourself as an Investor if you hold equity investments for more than 1 year and show income as long term capital gain (LTCG). You can also consider yourself an investor and gains as short term capital gains (STCG) if your holding period is more than 1 day and less than 1 year. We also discussed how it is best to show your capital gains as a business income if the frequency of trades is higher or if investing/trading is your primary source of income.

In this chapter we will discuss all aspects of taxation when trading is declared as a business income, which can be categorized either as:

  1. Speculative business income – Income from intraday equity trading is considered as speculative. It is considered as speculative as you would be trading without the intention of taking delivery of the contract.
  2. Non-speculative business income – Income from trading F&O (both intraday and overnight) on all the exchanges are considered as non-speculative business income as it has been specifically defined this way. F&O is also considered as non-speculative as these instruments are used for hedging and also for taking/giving delivery of the underlying contracts. Even though currently almost all equity, currency, & commodity contracts in India are cash-settled, but by definition, they give rise to giving/taking delivery (there are a few commodity futures contracts like gold and almost all agri-commodity contracts with the delivery option to it).Income from shorter-term equity delivery based trades (held for between 1 day to 1 year) are also best to be considered as non-speculative business income if the frequency of such trades executed by you is high or if investing/trading in the markets is your main source of income.

5.2 – Taxation of trading/business income

Unlike capital gains, there is no fixed taxation rate when you have a business income. Speculative and non-speculative business income has to be added to all your other income (salary, other business income, bank interest, rental income, and others), and taxes paid according to the tax slab you fall in. You can refer to chapter 1 for tax slabs as applicable for FY 2020-21.

Let me explain this with an example:

  • My salary – Rs.1,000,000/-
  • Short term capital gains from delivery based equity – Rs.100,000/-
  • Profits from F&O trading – Rs.100,000/-
  • Intraday equity trading – Rs.100,000/-

Gives these incomes for the year, what is my tax liability?

In order to find out my tax liability, I need to calculate my total income by summing up salary, and all business income (speculative and non-speculative). The reason capital gains are not added is that capital gains have fixed taxation rates unlike a salary, or business income.

Total income (salary + business) = Rs.1,000,000 (salary income) + Rs.100,000 (Profits from F&O trading) + Rs.100,000 (Intraday equity trading)  = Rs 1,200,000/-

I now have to pay tax on Rs 12,00,000/- based on the tax slab –

  • 0 – Rs.250,000 : 0% – Nil
  • 250,000 – Rs.500,000 : 5% – Rs.12,500/-
  • 500,000 – Rs.1,000,000 : 20% – Rs.100,000/-,
  • 1,000,000 – 1,200,000: 30% – Rs.60,000/-
  • Hence total tax : 12,500 + Rs.100,000 + Rs.60,000 = Rs.172,500/-

Now, I also have an additional income of Rs.100,000/- classified under short term capital gains from delivery based equity. The tax rate on this is flat 15%.

STCG: Rs 100,000/-, so at 15%, tax liability is Rs.15,000/-

Total tax = Rs.172,500 + Rs.15,000 = Rs.187,500/-

I hope this example gives you a basic orientation of how to treat your income and evaluate your tax liability.

We will now proceed to find a list of important factors that have to be kept in mind when declaring trading as a business income for taxation.

5.3 – Carry forward business loss

If you file your income tax returns on time July 31st for non-audit case and Sept 30th for audit case, you can carry forward any business loss that is incurred.

Speculative losses can be carried forward for 4 years and can be set-off only against any speculative gains you make in that period.

Non-speculative losses can be set-off against any other business income except salary income the same year. So they can be set-off against bank interest income, rental income, capital gains, but only in the same year.

You carry forward non-speculative losses to the next 8 years; however, do remember carried forward non-speculative losses can be set-off only against any non-speculative gains made in that period.

For example, consider this – my hotel business income is Rs 1,500,000/-, my interest income for the year is Rs.200,000/-, and  I make a non-speculative loss of Rs 700,000. In such a case, my tax liability for the year would be –

My gain is Rs 1,500,000/ from business and Rs.200,000/- from interest, so total of Rs.1,700,000/-.

I have a non-speculative business loss of Rs.700,000/-, which I can use to offset my business gains, and therefore lower my tax liability. Hence

Tax liability = Rs.1,700,000 – 700,000 = Rs.1,000,000/-

So I pay tax on Rs.1,000,000/- as per the tax slab I belong to, which would be –

  • 0 – Rs.250,000 : 0% – Nil
  • 250,000 – Rs.500,000 : 5% – Rs.12,500/-
  • 500,000 – Rs.1,000,000 : 20% – Rs.100,000/-,

Hence, Rs.112,500/- goes out as tax.

5.4 – Offsetting Speculative and non-speculative business income

Speculative (Intraday equity) loss can’t be offset with non-speculative (F&O) gains, but speculative gains can be offset with non-speculative losses.

If you incur speculative (intraday equity) loss of Rs.100,000/- for a year, and a non-speculative profit of Rs 100,000/-, then you cannot net-off each other and say zero profits. You would still have to pay taxes on Rs 100,000/- from non-speculative profit and carry forward the speculative loss.

For example, consider this –

  • Income from Salary = Rs.500,000/-
  • Non Speculative profit = Rs.100,000/-
  • Speculative loss = Rs.100,000/-

I calculate my tax liability as –

Total income = Income from Salary + Gains from Non Speculative Business income

= Rs.500,000 + Rs.100,000 = Rs.600,000/-

I’m required to pay the tax on Rs.600,000 as per the slab rates –

  • 0 – Rs.250,000 : 0% – Nil
  • 250,000 – Rs.500,000 : 5% – Rs.12,500/-
  • 500,000 – Rs.600,000 : 20% – Rs.20,000/-,

Hence total tax = Rs.12,500 + Rs.20,000 = Rs.32,500/-

I can carry forward speculative loss of Rs.100,000/-, which I can set-off against any future (up to 4 years) speculative gains. Also to reiterate, speculative business losses can be set-off only against other speculative gains either the same year or when carried forward. Speculative losses can’t be set-off against other business gains.

But if I had a speculative gain of Rs 100,000/- and non-speculative loss of Rs 100,000/- they can offset each other, and hence tax in the above example would be only on the salary of Rs 500,000/-.


5.5 What is tax-loss harvesting?

Towards the end of a financial year, you might have realized profits and unrealized losses. If you let it be, you will pay taxes on realized profits and carry forward your unrealized losses to next year. This would mean a higher tax outgo immediately, and hence any interest that you could have earned on that capital goes away as taxes.

You can very easily postpone this tax outgo by booking the unrealized loss, and immediately getting back on the same trade. By booking the loss, the tax liability for the financial year would reduce.

While there is no explicit regulation in India that disallows tax loss harvesting. In the US, if stocks are sold and bought back within 30 days just to reduce taxes on realized gains, they are called wash sales, and taxes are disallowed to be offset. Given this, it is advisable for clients trading in India to consult a CA while filing income tax returns, as they could potentially be questioned by the income tax authorities during tax scrutiny if the same stock is sold and bought back just to save on the taxes.

We at Zerodha are the only brokerage in India presently giving out a tax loss harvesting report, which will spot all opportunities for you to harvest losses. Click here to learn more.

5.6 – BTST (ATST) – Is it speculative, non-speculative, or STCG?

BTST (Buy today Sell tomorrow) or ATST (Acquire today sell tomorrow) is quite popular among equity traders. It is called BTST when you buy today and sell tomorrow without taking delivery of the stock.

Since you are not taking delivery, should it be considered as speculative similar to intraday equity trading?

There are both schools of thought, one which considers it to be speculative because no delivery was taken. However, I come from the second school, which is to consider it as non-speculative/STCG as the exchange itself charges the security transaction tax (STT) for BTST trades similar to regular delivery based trades. A factor to consider is if such BTST trades are done just a few times in the year show it as STCG, but if done frequently it is best to show it as speculative business income.

5.7 – Advance tax – business income

Paying advance tax is important when you have a business income. Like we discussed in the previous chapter, the advance tax has to be paid every year – 15% by 15th Jun, 45% by 15th Sep, 75% by 15th Dec, and 100% by 15th March. I guess the question that will arise is % of what?

The % of the annual tax that you are likely to pay, yes! When you have a business income you have to pay most of your taxes before the year ends on March 31st. The issue with trading as a business is that you might have a great year until September, but you can’t extrapolate this to say that you will continue to earn at the same rate until the end of the financial year. It could be more or less.

But everything said and done, you are required to pay that advance tax, otherwise, the penalty is 12% annualized for the time period it was not paid for. The best way to pay advance tax is by paying tax for that particular time period, so Sept 15th pay for what was earned until then, and by March 15th close to the year-end, you can make all balance payments as you would have a fair idea on how you will close the year. You can claim a tax refund if you end up paying more tax than what was required to pay for the financial year. Tax refunds are processed in a quick time by the IT department.

You can make your advance tax payments online by clicking on Challan No./ITNS 280 on https://incometaxindiaefiling.gov.in/

Also, here is an interesting link that helps you calculate your advance tax – http://www.incometaxindia.gov.in/Pages/tools/advance-tax-calculator.aspx. You can also check this link to see how exactly interest or penalty is calculated for non-payment of advance tax.

5.8 – Balance sheet and P&L statements –

When you have declared trading as a business income, you are required to like any other business to create a balance sheet and P&L or income statement for the financial year. Both these financial statements might need an audit based on your turnover and profitability. We will discuss more on this in the next chapter.

5.9 – Turnover and Tax audit

When is an audit required?

An audit is required if you have a business income and if your business turnover is more than Rs 5 crore for a financial year (from FY 20-21). In the case of digital transactions (equity transactions are 100% digital), this turnover limit is Rs 5 crores. For equity traders, an audit is also required as per section 44AD in cases where turnover is less than Rs.5 Crores but profits are lesser than 6% of the turnover and total income is above the minimum exemption limit.

We will discuss this in detail in the next chapter.

However, let us understand what audit really means.

The dictionary meaning of the term “audit” is check, review, inspection, etc. There are various types of audits prescribed under different laws like company law requires a company audit; cost accounting law requires a cost audit, etc. Likewise, the Income-tax Law requires the taxpayer to get the audit of the accounts of his business/profession from the view point of Income-tax Law if he meets the above-mentioned turnover criteria.

Check this link for FAQ’s on tax audit on the income tax website for more.

An audit can also be defined as having an accountant verify if you have prepared all your accounts right. In this case, it is getting an accountant to check if you have created a correct balance sheet and P&L statement for the year. Ideally, this audit should be done by the IT department itself, but considering the number of balance sheets out there, it is surely impossible for the IT department to audit each one of them. Hence we need a Chartered accountant (CA), who is a qualified professional and authorized by the Income-tax department to perform audits on the balance sheet and P&L statements. You the taxpayer can use any CA of your choice.

What role should a CA play?

Ideally, a CA is required to only audit and sign on the balance sheets and P&L statements. But a CA also typically ends up creating your balance sheets and P&L statements and will audit them only if required.  We will in the next chapter briefly explain how a CA typically creates these two statements.

The importance of the audit process by a CA cannot be understated, apart from all the reporting requirements an audit also helps traders/investors know their financial health, ensure it faithfully reflects the income, and claims for deduction are correctly made. It also helps lenders evaluate credibility, and act as a check for any fraudulent practices.

Which ITR form to use? – ITR3 (ITR 4 until 2016), we will discuss more on this in the last chapter. I have come across incidents where people have declared both speculative and non-speculative as capital gains to avoid having to declare business income, and not having to use ITR3. Taking a shortcut like this could mean a lot of trouble if called for an IT scrutiny.

Business expenses when trading – Advantage of showing trading as a business is that you can show all expenses incurred as a cost which can then be used to reduce your tax outgo and if a net loss for the year after all these costs, it can be carried forward as explained above.

Following are some of the expenses that can be shown as a cost when trading

  • All charges when trading (STT, Brokerage, Exchange charges, and all other taxes). I hope you remember that STT can’t be shown as a cost when declaring income as capital gains, but it can be in case of business income.
  • Internet/phone bills if used for trading (portion proportionate to your usage on the bill)
  • Depreciation of computer/other electronics (used for trading)
  • Rental expense (if the place used for trading if a room used – a portion of your rent)
  • Salary paid to anyone helping you trade
  • Advisory fees, cost of books, newspapers, subscriptions, and more…

Key takeaways from this chapter

  1. Speculative business income if trading intraday equity.
  2. Non-speculative if trading F&O, or short term equity delivery actively.
  3. Speculative losses can’t be set-off against non-speculative gains.
  4. The advance tax has to be paid when trading as a business –15% by Jun 15th 45% by Sep 15th, 75% by Dec 15th, and 100% by Mar 15th.
  5. Can claim all expenses if income from trading shown as a business income.

Disclaimer – Do consult a chartered accountant (CA) before filing your returns. The content above is in the context of taxation for retail individual investors/traders only.


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  1. Arshdeep says:

    “An audit is required if you have a business income and if your business turnover is more than Rs.1 Crore for the given financial year. Audit is also required as per section 44AD in cases where turnover is less than Rs.1 Crore but profits are lesser than 8% of the turnover.”

    I have two questions –
    1) Is an audit required in case I am incurring loss and my turnover is less than 1 cr?
    2) How is turnover calculated for advance tax calculation, because the full year is not over by the time we calculate advance tax?

    • Nithin Kamath says:

      1. If your net income for the year (trading + everything else) is less than 2.5lks, you don’t have to pay any taxes, and hence no audit will be required. But if your net income for the year is above 2.5lks and if you make a trading loss (F&O or intraday equity), yep you need to get an audit.

      2. There is no need of calculating turnover for advance tax. Based on whatever profit you have made till the end of sept, dec, and March periods, just pay incremental tax accordingly.

      • Arshdeep says:

        Thanks for the quick reply Sir !

      • Sourav says:

        If salary income 500000 per anum and loss in Intraday 60000. Audit is needed? Yes or no.

        • Nithin Kamath says:

          Audit is based on your turnover. Since there is a loss and you fall under a tax slab, yeah audit is needed. Check all the chapters, audit is quite a simple thing.

          • bhaskar kakati says:

            If I have a loss of 20,000 then i need to get it audited for which i will have to pay CA another 10-15,000. So more loss if you make a loss in trading. What a shame, Audit should not be there if there is loss.

          • CA Abhishek says:

            Your article is too Good and covered all the aspect but your attention may be directed to the Para 5 of “Guidance Note on Tax Audit under Section 44AB of the Income Tax Act,1961″ issued by The Institute of Chartered Accountants of India (ICAI), which provides the guidelines regarding “Turnover or Gross Receipts in respect of transactions in shares..” as follows:

            a) In a speculative transaction, the contract for sale or purchase which is entered into is not completed by giving or receiving delivery so as to result in the sale as per value of contract note.

            b) The contract is settled otherwise and squared up by paying out the difference which may be positive or negative. As such, in such transaction the difference amount is ‘turnover’.i.e intra day is covered under speculative non delivery based transaction.

            and caring about all the other provisions, i suggest that Audit is not required in this case.

      • Mohamed Rashid Tharayil says:

        Advance tax is not required if income is computed under section 44AD; see Section 208 of Income tax Act.

      • Rohit CHOUDHARY says:

        Salary :- 3.5lakh
        intraday income (year) :- 1 lakh (approx after paid tax)

        now question is, am i need to pay income tax again if all taxes already deduct on end of the day (intraday)

        • Nithin Kamath says:

          The taxes you are paying is transaction tax. Income tax still has to be paid. You need to add this 1lk to 3.5lks and pay according to the tax slab you are in.

          • Pranay says:

            If I have a short term loss ( trading in only equity cash market ) which is treated as non-speculative profit/loss and shown under the head ‘business income’ then how to show the shares standing on 31st March -whether as stock in trade or as investments ?

          • Amit mukherjee says:

            I am a future option trader…and 2018_2019 my total turnover show in the zerodha app 2.3 cr and my losses 310000 lakhs….will i pay tax or audit required please sir tell me …..and please sir give some contact zerodha CA details….

          • Nithin Kamath says:

            Yeah, best to get audited. Check out taxiq.in

      • Ajay Kumar Mohanta says:

        Sir, first of all great article. I have a personal question, please help me out. My salaried income is around 11 lakh, last financial year, I made
        1) Intraday EQUITY trading LOSS: 15000/-
        2) Delivery based PROFIT (<1 Yr): 38000/-
        3) Option trading LOSS: 35000/-

        I don't trade daily. In whole yr, I might have placed less than 100 orders in total. I do not wish to get my account audited and also not claim any loss in ITR 4. But do I still have to pay SHORT TERM CAPITAL GAIN TAX, or I can just forget whole share market thing and file ITR 1. Please guide.

        Thank You

      • Nitesh says:

        I started Stock trading on September month did equity with a loss of 30k and intraday trade with a loss of 40k but then I started F & O trading and I earned 8 lacs in 2 months . When do I have to pay tax and I want to know about taxation charges as well as do I need to audit. Because I don’t have a salary income. I am just a stock trades. One more if earn above 1 crore in a single year what will be the taxation on that.

        • Nithin Kamath says:

          Trading is a business, so like every business you need to pay an advance tax every quarter on your expected year end income. IF you pay more, you can always get a refund.
          Above 1crore, there is a surcharge of 15% on your total tax outgo.

          • nitesh says:

            sir, do i need do get audit i checked my zerodha tax p&l my f&o turnover is 1.3crore and my profit is around 2. lacs.

          • Nithin Kamath says:

            Can you check the chapter on turnover and audit. Have explained there in detail.

      • Divyajeet says:

        Hi team. Did we just lost another feature i.e. Tax Harvest with the launch of “interoperability framework” ? Waiting impatiently for the reply.

        • Nithin Kamath says:

          hmm.. yeah, you will not be able to buy on one and sell on another exchange to show it as an exit anymore. You will have to wait for one day after selling to buy the stock back again.

  2. Sunil kumar saxena says:

    क्या इंट्रा डे trading जो margen लेकर की गई है
    1 क्या total turnover पर tax देना होगा
    2 क्या only profit पर tax देना होगा loss पर नहीँ।

    • Nithin Kamath says:

      Tax is not on the turnover, it is on the net profits only. Turnover is to determine if you need a tax audit or not.


        Whether tax audit required in foll0wing case:
        Total trading turnover – more than 1 crore in FY 15-16, but incurred loss in trading.
        Also, total income in same year is less than 2.00 Lakhs .
        Is tax audit required?
        Also – as a valued added service , can Zerodha provide services of tax consultants to prepare file returns of traders?

  3. Krish says:

    My Salary is – Rs. 815880/-
    Short term capital gains from deliver based equity – Rs. 26666/-
    Profits from F&O trading – Rs. 420923/-

    Total income (salary + FNO profit) – Rs. 1236803/-
    Hence tax – Rs. 196041/-

    Tax on short term capital gain -Rs. 4000/-

    Hence my total tax stands at Rs. 200041/-

    TDS paid – Rs. 90822/-

    So my tax blance is Rs. 109219/-

    I haven’t paid any advance tax so far. So can you please help me to calculate the penalty(12%) amount for this.Is it simply 12% of Rs. 109219 or not?

    • Nithin Kamath says:

      Krish, didn’t want to complicate the chapter, here is how interest is calculated for non-payment of advance tax.

      In your case since no advance tax has been paid till now, for April 1st to March 31st 2015 point 3 below is applicable (234C) and from April 1st this year till you pay the taxes point 2 (234 B) is applicable .

      i) INTEREST U/S 234A: For late or non furnishing of return, simple interest @ 1% for every month or part thereof from the due date of filing of return to the date of furnishing of return, on the tax as determined u/s 143(1) or on regular assessment as reduced by TDS/advance tax paid or tax reliefs, if any, under Double Tax Avoidance Agreements with foreign countries.

      (ii) INTEREST U/S 234B: For short fall in payment of advance tax by more than 10%, simple interest @ 1% per month or part thereof is chargeable from 1st April of the assessment year to the date of processing u/s 143(1) or to the date of completion of regular assessment, on the tax as determined u/s 143(1) or on regular assessment less advance tax paid/ TDS or tax reliefs, if any, under Double Tax Avoidance Agreements with foreign countries.

      (iii) INTEREST U/S 234C: For deferment of advance tax. If advance tax paid by 15th September is less than 30% of advance tax payable, simple interest @ 1% is payable for three months on tax determined on returned income as reduced by TDS/TCS/Amount of advance tax already paid or tax relief, if any, under Double Tax Avoidance Agreement with forgiving contribution. Similarly, if amount of tax paid on or before 15th December is less than 60% of tax due on returned income, interest @ 1% per month is to be charged for 3 months on the amount stated as above. Again, if the advance tax paid by 15th March is less than tax due on returned income, interest @ 1% per month on the shortfall is to be charged for one month.

      (iv) INTEREST U/S 234D: Interest @ 0.5% is levied under this Section when any refund is granted to the assessee u/s 143(1) and on regular assessment it is found that either no refund is due or the amount already refunded exceeds the refund determined on regular assessment. The said interest is levied @ 0.5% on the whole or excess amount so refunded for every month or part thereof from the date of grant of refund to the date of such regular assessment.

      • Nithin Kamath says:

        Hey Krish, sorry if I suddenly sounded like a chartered accountant putting up this section of the act.. 🙂

        For advance tax not paid between April 1st 2014 to March 31st 2015, 3.7% of the tax balance will be the interest. After March 31st to till you pay, interest will be at 1% per month.
        Hope this helps.

        • Vishal says:

          Hi Nithin, can a person pay tax on his business income from F&O at the end of two years with penalty although filing IT4 each year? By doing so, people can have a kind of loan at 12% from IT department which otherwise would have gone in income tax.

          • Nithin Kamath says:

            Vishal, the penalty can be paid, but that will be black mark on your ITR. Also if you don’t file your ITR on time, you can’t carry forward your trading losses or net it off against other business gains.

  4. Omkar says:


    I have gone through your article about taxation. It’s really wonderful article for beginners like me. It has cleared many concepts.
    Also, I checked ‘Q’ and my profit (intra day and short term equity) and turnover for the same. It looks like from the statistics, I need audit as my turnover is less than 1 crore and profit is around 6% of turnover. Can Zerodha provide any support for audit, CA? Further, if I look at the stats, I have got return of around 36% on the invested amount (here I calculate profit as, if I have invested Rs. 100 in stocks, I got Rs 136 now, which according to definition of turnover comes around 26% (36*100/136)). Even if this return/profit(36%) is greater than 8%, according to definition of turnover, it’s merely coming as 6%. In such case, what advise would you give to beginners like me? Or, do we always have to keep in mind the 8% figure before selling the stocks?

    I am salaried employee and I have been filling ITR1 form for last 2 years. I could find ITR4S form but not ITR4 form in my online account of IT filing. You have mentioned to use ITR4. WHat should I do in this case?

    • Nithin Kamath says:

      There are new ITR forms being put up this year, ITR4 is still not out, should be available in the next few days.
      You will need to use ITR4 if you have done F&O trading. In ITR 4, if your profit is shown less than 8% of turnover, you will not be able to submit ITR forms as a no audit case. That 8% logic is already pre-coded in ITR4. Audit requirement is based on turnover and not really on how much profit you earned.

      • Omkar says:

        Hi Nithin,

        Thanks for your reply for my previous post.

        You said that “Audit requirement is based on turnover and not really on how much profit you earned.” My turnover is less than Rs. 1 Crore and profit is less than 6% of turnover.(These numbers are from Q tool.) In that case do I need audit? If yes, do you provide any support for audit/CA?

        I have not done F/O trading, in that case which form should I use?

        • Nithin Kamath says:

          Omkar, currently not providing any CA support from Zerodha. If you are in Bangalore you can contact Taxiq.in.
          If no F&O trading and no intraday equity trading, and only equity delivery based or capital gains, then no need of an audit irrespective of turnover. You can use ITR2 in this case.
          If you have done intraday equity trading, then you have to show this as speculative business income and you will require ITR 4 and an audit.

      • JEYASHANKAR B says:

        Hi.. My profit is less than 8% and my turnover is less than 1cr
        And my total income is less than 2.5L.
        Do I need an audit? I need to file for a refund as TDS@10% . I’m a professional.

        • Nithin Kamath says:

          No need of an audit. You can file for your refund as well.

          • Charandeep Singh says:

            In this Case, Which form do i file?ITR-3 or ITR-2

          • Akarsh says:

            Hello Sir,

            Just like Jeyashankar B in above comment,

            (Here I am talking about, FY 17-18, from 1st April 2017 to 31st Mar 2018 ONLY, After 31st Mar 2018, my turnover has drastically increased as before I was only checking the market out. Since I was new to trading.)

            I do ONLY EQUITY.
            I have small turnover below 1lkh.
            I have really small losses in STCG & Intraday.
            I have holdings as LTCG & Mutual Funds.
            I fall in the below 2.5lkh income slab.
            I don’t need to pay tax.
            BUT I want to file an ITR3 and declare my losses, claim business related expenditure etc.

            Question. Do I have to get audited?

            It’ll cost me around 7k. Then after adding CA my small losses will become big losses.

            Thank you.

          • Nithin Kamath says:

            Not required as your total income is below 2.5lks

  5. sambu says:

    Hi Nithin,

    from last november 2014, my turnover is more then 3 crores and overall I have incurred a total loss upto 5 lakhs. I did a lot of intraday trades and no longterm investment. do I incur any penalty for non-declarations? what all should I send to the CA? Just the profit and loss statment from start of november until now?


    • Nithin Kamath says:

      Sambu, since you have incurred a loss there is no advance tax liability and hence no interest/penalty. You can file your returns before Sept 30th, and yes P&L statement would be enough from November till March 31st 2015. If you are trading at Zerodha send the tax P&L statement and also the turnover statement.

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