7.1 – Income Tax Return (ITR) Forms
The last step of taxation is filing your Income tax returns (ITR), and this can be done using ITR forms. Find below a brief explanation of everything important on ITR that you need to know as an investor/trader.
I have noticed from my interactions with many that they are confused between the two actions i.e ‘paying income tax’ and ‘filing income tax’. Many are of the opinion that if they pay income tax the act of filing income tax is not really necessary. This is not true, let me explain why.
Paying Income tax – If you are employed and draw a salary you very clearly know that your employer on your behalf deducts tax (based on your tax slab) and pays the income tax on your behalf. This is usually called ‘Tax Deducted at Source (TDS)’. Now, what if you have an income source besides your salary?
For example for the given year assume besides drawing a salary, you also made a profit by actively trading delivery based equity trading. As we now know this activity falls under “Non-speculative Business Income”. Since the employer is not privy to this activity it becomes your responsibility to declare this source of income to the Income-tax department and paying the appropriate amount as tax.
Filing Income tax returns – Filing income tax returns is a mandatory way of communicating to the IT department all the sources of income you have including your salary. An Income Tax Return Form (ITR) form is simply a form that you need to fill up declaring your sources of income. There are different ITR forms for different sources of income. You may wonder why I should file my returns when I don’t have any other source of income besides salary. Well, in such a case by virtue of filing your income tax returns (via appropriate ITR form) you are officially communicating to the income tax department that you do not have any other source of income.
So in essence, the act of filing your returns is your official communication to the IT department about all the sources of income that you have along with the tax you have paid against that income. You do this via the prescribed ITR forms.
More formally, an ITR is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. There are different types of ITR forms, one needs to select the appropriate ITR form, based on the different sources of income. These forms can be downloaded from here https://incometaxindiaefiling.gov.in/
7.2 – Different ITR forms
In the context of this module, which is focused on individuals having investments as capital gains or trading as a business income, the important ITR forms to know about are:
ITR 1 – when you earn a salary, interest income, or rental income from only one house property, you can use ITR 1 forms to file your income tax returns (total income up to Rs 50lks). This is the most common type, but if you have capital gains or trading as a business income, you can’t use this ITR form.
ITR 2 – for individuals and HUF not carrying out any business/profession and when you have a salary, interest income, income from house property or income from capital gains, you can use ITR 2. So if you are an individual who only invests in the market (remember investor, hence capital gains), you need to use ITR2
ITR 3(ITR 4 renamed to ITR3 from 2017) – when you have a salary, interest income, income from house property, income from capital gains, and income from business/profession, you can use ITR 3.
So if you are an individual who is declaring trading as a business income, you have to use ITR 3. If you are an investor and trader, you can show trading under business income and investments as capital gains on the same ITR 3 form.
ITR 4 (ITR 4S earlier) – this is similar to ITR3 but with a presumptive scheme, if section 44AD and 44AE used for computation of business income. ITR 4 can’t be used to declare any capital gains or if losses have to be carried forward. So you can use ITR 4 only if you have business income (speculative + non-speculative), but it is best avoided if by use of this form you are reducing your tax liability.
7.3 – Exploring ITR 4 (4S until 2017)
The advantage of ITR 4 is that it can be used by taxpayers who do not maintain a regular book of accounts or want it to be audited (refer chapter 2) provided your turnover is lesser than Rs 5 Crores for the year.
You can get away without maintaining books or getting audited if you firstly calculate turnover based on section 44AD (check the previous chapter) and then declare 6%* of this turnover as your presumptive income. You have to then pay taxes adding this 6%* of the turnover to your other income and pay tax as per the slabs.
So if you are a trader with turnover less than Rs 5 Crores for the year (was Rs 2 crore until FY 19/20) and profit less than 6%* of the turnover with only business income (not possible if you have capital gains), you can declare presumptive income of 6%* of the turnover, and get away from the need to get your books audited. There is no need to pay advance taxes if you are using ITR4 (4S earlier), but you are not allowed to deduct any business expenses against your income.
For example, assume my salary was Rs.500,000/- for the last FY, and I had incurred F&O loss of Rs.25,000/- on a turnover of Rs.400,000/-. Since my profit is less than 6%* (25,000/400,000) of my turnover I will need to use ITR4, maintain books, and have them audited. Instead of this, I could use ITR4S and declare 6%* of Rs.400,000/- (business turnover) or Rs.24,000/- as my presumptive trading business income even though I have incurred a loss.
Update: % is reduced from 8% to 6% from AY 2017/18 or FY 2016/17
My total income for the year is Rs 500,000 (salary) + R 24,000 (business income) = Rs.524,000/-. Therefore my tax liability would be as follows –
Upto Rs.250,000 – No Tax
Between Rs.250,000 to Rs.500,000 – 5% – Rs.12,500/-
Between Rs.500,000 to Rs.524,000 – 20% – Rs.4,800/-
Total tax = Rs.12,500 + Rs.4,800 = Rs.17,300/-
Here, by virtue of declaring a presumptive business income of Rs.24,000/- I’m paying an additional tax of Rs.4,800/-. This works out to be a cheaper alternative than getting an audit done for which the CA fees could have been Rs.15,000/- and above. So using ITR4 would make sense only if your turnover is low, hence declaring 6% of turnover as income would work out cheaper than paying an audit fee to the CA.
7.4 – Quick FAQ and notes
How to file the return of income electronically?
The income-tax department has established an independent portal for e-filing of return of income. You can log on to www.incometaxindiaefiling.gov.in for e-filing the return of income. Check this very nice video on e-filing put by the IT department.
Is it necessary to attach documents along with the return of income?
ITR return forms are attachment-less forms. Hence along with the ITR form (whether filed manually or filed electronically), you are not required to attach any document (like proof of investment, TDS certificates, etc) unless if you fall under the audit case.
However, these documents should be retained by you and should be produced before the tax authorities when demanded in situations like assessment, inquiry, scrutiny, etc. But in audit cases, a soft copy of the balance sheet, P&L, and any notes along with the audit report needs to be attached.
What is the difference between e-payment and e-filing?
E-payment is the process of electronic payment of tax (i.e., by net banking or SBI’s debit/credit card)
E-filing is the process of electronically furnishing (filing) of return of income.
Using the e-payment and e-filing facility, payment of tax and furnishing of return is quick, easy, and hassle-free.
Is it necessary to file the return of income when I do not have any positive income?
If you have sustained a loss in the financial year, which you propose to carry forward to the subsequent year for adjustment against subsequent year(s) positive income, you must make a claim of loss by filing your return before the due date.
What are the due dates for filing returns of income/loss?
If no audit: July 31st
If audit: September 30th
What is to be mentioned as the “nature of business” on ITR 3 (ITR 4 until 2017)?
Nature of business can be mentioned as Trading-Others (Code: 0204) – until 2017
For FY 2017/18, Code: 13010 – Financial intermediation/Investment activities. This seems to be the closest category to investment/trading related activity.
If I fail to furnish my return within the due date, will I be fined or penalized?
Yes, if you have not furnished the return within the due date, you will have to pay interest on tax due. If the return is not filed up to the end of the assessment year, in addition to interest, a penalty of Rs. 5,000 shall be levied under section 271F.
How to show profit and loss on the balance sheet?
You can show all positive turnover as gross receipts, and negative turnover as gross sales.
Can a return be filed after the due date?
Yes, you can. Return filed after the prescribed due date is called a belated return. If one could not file the return of income on or before the prescribed due date, then he can file a belated return. A belated return can be filed within a period of one year from the end of the financial year or before completion of the assessment, whichever is earlier. A belated return attracts interest and penalty as discussed in the previous FAQ.
For Example – In the case of income earned during FY 2013-14, the belated return can be filed up to 31st March 2016. However, if the return is filed after 31st March 2016, the penalty under section 271F can be levied.
If I have committed any mistake in my original return, am I permitted to file a revised return to correct the mistake?
Yes, provided the original return has been filed before the due date and the IT Department has not completed the assessment. It is expected that the mistake in the original return is of a genuine and bonafide nature and not rectification of any deliberate mistake. However, a belated return (being a return filed after the due date) cannot be revised.
Return can be revised within a period of one year from the end of the relevant assessment year or before completion of the assessment whichever is earlier.
For example, in case of income earned during FY 2013-14, the due date of filing the return of income (considering no audit) is 31st July 2014. If the return of income is filed on or before 31st July 2014 then the return can be revised up to 31st March 2016 (assuming assessment is not completed by that date). However, if the return is filed after 31st July 2014, then it will be a belated return and a belated return cannot be revised.
ITR forms are typically Microsoft Excel sheets where you can fill all the relevant details, and the calculations happen automatically.
Find attached an ITR 4 form with all types of income, salary, capital gains, trading as a business, and rental income. This should act as an easy reference if you are trying to fill this on your own. This is the ITR4 form from AY 14/15(FY 13/14).
Here is a Sample ITR 3 form (FY 2018-19)
Key takeaways from this chapter
- The act of paying your taxes is called “Tax Payment”, which can be done via e-payment
- The act of communicating different sources of income and tax paid against that is called “Income Tax Return filing”
- Filing income tax returns is mandatory, even though you have paid taxes
- An ITR form should be used to file taxes
- Use different ITRs for different sources of income
- ITR 4S for presumptive business income. Use this to lower your cash outflow (paying taxes versus audit fees)
Phew! That brings us to the end of the taxation module. Keeping it simple is most challenging, especially a topic like this where almost every other word is a jargon. Hopefully, I have done a decent job with it, and this module acts as your ready reckoner for everything on taxation when trading and investing.
Financial discipline is the key to long term wealth creation, and it starts with the compliant filing of your income tax returns. It is best not to avoid or postpone especially with the advancement of technology and reach of our income tax department.
Do help spread the word,
Happy Trading,
Nithin Kamath
Zerodha
Special thanks to Tax IQ for providing valuable inputs throughout this module.
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.
my total income is less than 250000 per year includes trading losses/gains ,can i pay income tax or not ? or any other forms to fill and submit
You don’t need to pay any tax if your total income is less than Rs 2.5lks. But do go ahead and file your income tax returns using ITR4.
Nithin , My salary is less than 2.5k after adding my total gross is also less than 2.5k,you have mentioned that less than 2.5k is not required to pay tax,But you insisted to file ITR-4 is that mandatory..in that case what should I attach.
Vinod, if your total income is less than 2.5lks, then filing ITR is not mandatory. But it is advisable to do so. There is nothing you need to attach, you just have to fill the ITR4 using the help of CA and file it online.
Thanks for providing nice material, but little confusion.. I do intraday(some times), STCG LTCG, but overall income is less than 2.5lakhs.. Whether I have to use ITR3 or ITR 4( I dont have any other income source)?
ITR3
I m government salaried employee and do intraday (loss of around 11500) then which form i fill?
I read today that govt employee cant do intraday then what can i do now?
ITR3, I don’t think it is any issue if you file using ITR3.
Hi,
I am getting scholarship for the cost of education which is coming under tax exempted income and i used to file itr 1 earlier to declare this income under exempted income for reporting purposes. Last year i made a profit of rs 3000 from equity. So which itr should i file to include both scholarship income and equity income?
ITR2.
Hi,
I am a salaried person having a salary of 3 lacs p.a and i do intraday equity trading and on which my turnover is 1 lac and from this i have made a profit of rs 10000.
Should i need to be get audited my tax details and what sort of ITR form needs to be use on this case.
Thanks
ITR3. Since your profit is more than 8% of turnover, no need of audit.
HI Sir,
I got 3.3 L salary last year, and short term gain of 2,08,000. I don’t do trading. No LongTerm Gain as well.
But I got Chit fund Dividend of 65000 approx.
Could you please suggest me which ITR should I be filling and also for chit fund dividend income should I be filling it as “Income from Other Sources” (or) “Dividend Income”.
Thanking You in Advance.
ITR2. Chit fund income is in the nature of interest income, so can be declared under that on ITR2.
Sir,
I have salary of 240000 pa. I have intraday loss of 6000. F&o loss of 11000, short term gain of 25000. Long term gain of 40000. And Gain of 30000 in NCD(Muthooot finance).
Turnover is:
1. Intraday– 120000
2. F&o – – 35000
3. Delivery(sell) – – 550000
What ITR form to be used?
Need of audit or not?
Delivery turnover to be added in total turnover or not?
ITR3. If you have no taxes to pay, then you can avoid audit. No need to add delivery turnover, it is capital gains.
Hi Sir,
I have
Salary – 6.6LPA
Intraday Loss – 6000/-
Short Term Gain – 2500/-
Long Term Gain – 200/-
F&0 Loss – 4000/- with 62,000/- turnover.
Which form I have to choose?
ITR3
Sir
I am an psu employee. My salary income 5.3 lakh. I trade on zerodha kite platform in Intrady, BTST & delivery basis. From zerodha back office I found these data
Intraday profit = – 37059 (loss)
Intraday Turnovers = 57768
Short Term profit = – 23081 (loss)
Short term turnovers = 630232
Long term gain or turn over = N/A
What ITR should I filled and any audit is required or not. Kindly help.
ITR3. If you want to carry forward intraday loss, you will need audit.
Hello sir,
I m govt employee and do intraday( loss of 11000) so which itr for i fill?
My salary 4.5 lac per annum and loss in intraday so i need to tax audit?
Govt employee can do intraday?
ITR3. Ideally yeah audit, but if you don’t want to carry forward loss you can show 6% of turnover as profit. Best to find out from your department if you can intraday trade.
Hello Nithin,
I dont have any salary income
I do only trading
Short term Loss 1Lakhs
Long term loss 10k
Intraday loss 50k
FNO Gain 10K
total turnover 10lakhs
Can i file ITR using ITR4 form by showing preassumptive income if dont want to carry loss?
Can you please recommend which form require to file an ITR?
It is best to use ITR3 and you wouldn’t need any audit etc.
My salary is Rs 7,00,000/-PA and i have trading loss of around Rs 5,00,000/-. 99% of my trading was in Future & Option & only 1% in equity cash.Total turnover is below 1 crore. Please advice which ITR to be filled.
You will need to use ITR4, and you would also need to have it audited. Check out chapters 5 & 6 on turnover and audit.
Mine is similar case, have huge losses in F&O and want submit them in ITR.
I was trying to fill the ITR 4 without audit(0.5% of my gross turnover is way less then what I have to pay to CA audit)
1) I am unable to enter negative value
2) Note has been mentioned saying that if profit is less than mentioned limits, audit is mandatory and ITR 3 or 5 must be used
Can you help me here
1. You can’t enter negative on ITR4, you have to mandatorily show 6% of turnover as profits. You should use ITR3.
Hi Nithin,
I have the following for FY 2017-18:
Intraday trading loss -Rs 9,140
STCG from delivery trades – Rs 65,415
Interest from bank deposits – Rs. 202,415
My query:
1. Should I be using ITR form 3?
2. In ITR form 3, what should I select for “Nature of Business” as the trading option is not available.
3. In ITR form 3 under the profit and loss tab, what should be inputted in serial number 53 for gross receipt and gross profit on the intraday loss?
4. Is audit required considering my above income and loss?
Kindly assist with my queries.
1.Yes
2. You can show under Financial intermediation services and under that Investment activities. The closest I can find.
3. No audit not required.
thanks nithin for guidance
i ‘m govt employ salary about 8 lakh &total trade in f &o loss 115658and mutual fund as sip
Can a govt employee do trading…? how can a govt employee trade when trading timings are equal to office timings.
Can a govt employee do trading is something best to be asked with your department itself. There are many govt employees who trade in the name of their family, and yeah do it very actively.
I think u forgot to mention about rebate of 2000, which is provided to resident individual
Shiva, we are trying to focus only on taxation around trading, not general aspects on taxation.
if i m earning from trading in stock market then how much tax i ll hv to pay when we r alredy paying all taxes like STT, STAMP DUTY, GST and all. kindly reply in detail. thanx in advance
On your net profit after all costs, at the tax slab you fall in.
Hello Nithin,
Is it tax slab we fall in – or flat 15%?
Tax slab you are in, but maximum of 15%. So if you are in higher slab, you still pay 15%.
Sir, my business income (personal business, not intraday or FnO) is less than Rs 2.5lac. My turnover is less than 1 crore and I have losses of about 70000. I have traded in delivery based, intraday and options. Do I need an audit?
Since my total income is less than 2.5 lac, I thought that I won’t need an audit.
Manish yes you are right, no audit as you don’t have any tax liability as your total income less than 2.5lks
I have been searching in the internet for taxation on trading as a business. I am delighted to see such a comprehensive coverage of the concept explained well in one place. It is wonderful to see links to some other relevant articles also. Thanks for the nice work!!!
Hi Nithin,
In the module you mentioned that we have to use ITR 4 if we declare ourselves as trader. But I checked the income tax site and it mentions that ITR 4 has to be used for AY 2014-15. Currently I will be filing returns in AY 2015-16. So I cannot use ITR4. Again ITR 4S does not have facility to record capital gains. So I am in dilemma which form to use. ITR 4 or ITR 4S?
Please advise.
Regards,
Ganesh
Ganesh, new ITR4 forms is still not up on the income tax website. It is expected to be available in the next 10 days.
Thanks Nithin for the reply.
In the training module you had mentioned that if you want to save audit fees can declare 8% profit and file returns using ITR 4S.
But in the new ITR 4S, I don’t see a section where I can enter details for capital gains which I had made in 2014-15 year. Do I have to use another ITR for capital gains in addition to ITR 4S.
Regards,
Ganesh
Ganesh, like I have mentioned above ITR4S can’t be used if you have capital gains. New ITR forms are being put up by the IT department this year, ITR4 should be out in the next few days.
Great Article, I have been trading for more than 5 years but never got any insight
Regarding claim:As a scalper,if I am trading 20 F&O trades per day and my yearly income is around 5lakhs & have to pay 25k as per the slab. For example per day brokerage+taxes are around 1500rupees and approx 3.6lakhs/year.If trading is my only source of income & if iam filing itr how much i can able to claim?
Sanatharam, you can claim for all your expenses, three is no limit on that. You need to use ITR4.
The claim limit should be around INR 25000 not more than that sir?
Can I claim 25k or 3.6 lakes?
You can claim for entire 3.6 lks. Along with claiming 3.6lks in brokerage and charges, you can also claim all other expenses that I have mentioned in chapter 5.
Hello Nithin,
I should say its a great initiative by Zerodha. I appreciate this effort for retail traders.
I have investment in delivery based shares and also trade in Futures and Options. I have sold some shares from delivery and made an overall loss of INR 1,000 (approx) and an overall loss of INR 85,000 in F&O. I do not have any income from salary but I made some profit through Bank Fixed Deposits on which bank has deducted TDS. I need your advise on the follwing –
1) I should use ITR4 or ITR4S?
2) I still don’t see ITR4 available for assesment year 2015-16? By when we can expect ITR4 to be made available?
3) Since, my income is well below the limit of INR 2,50,000 I am not supposed to maintrain any book and no audit required?
Please provide your valuable suggestion.
Thanks,
1. ITR 4
2. Should be available in the next two weeks
3. Yes, no audit required.
Hi Nithin….this module a great help indeed…..a big thanks for it. To be more clear in the above case, can we add other business expenses like phone & net bills along with the F&O losses to be carried forward in ITR 4 if total income less than 2.5 lakhs without any audit?
Yep, you can add all your costs and carry it forward as a business loss.
Hi Nithin,
Thanks for great initiative.
I have short term capital losses and also intraday losses(only 3 intraday trades). Do I need to file ITR4?
If I do not want to carry forward intraday losses then can I file ITR2?
Ashok, if you want to be 100% compliant, yes you have to use ITR4 as there is no other way to show your intraday losses which has to be considered as speculative business income. Speculative business income can’t be declared on ITR2.
Can ITR4S be used to claim for all the business expenses ?
No Wajid, You are not allowed to deduct any business expenses against the income
Hi Nithin Kamath,
suppose i have no other income other than trading in f&o and made a profit of 550000 excluding (brokerage,stt,turnover charges etc)
1.how incometax have to be paid (will they send notice to me ) or stt and other charges includes the income tax ? if not ,then how do they collect tax from me
2.does 5.5lakh needs auditing
3.is turnover calculated on the value or on my profits and losses
Murtuza, there is no one line answer for this. This entire module, Markets and taxation, explains it in detail. Do read up.
Hi Nithin,karthik n zerodha team,
I take this opportunity to express my sincere gratitude to zerodha team especially to Karthik & Nithin for giving such a valuable content to its customers@free of cost.
I can say no other broker in India till now gives this kind of valuable contents through their portal.I m quite sure u r the game changer in this industry.From the starting with discount brokerage concept,now u r reached a milestone of giving sophisticated platform like “pi” with technical chart n put orders in same screen to traders @ free of cost.
I think, leading broking houses till now even think on this kind of tools..
Through ur best selection of modules in varsity u done a tremendous work for educating every kind of participant in market…Traders and investors u addressed especially through “technical analysis & fundamental analysis”…if a layman gone through ur varsity modules will at least have made a minimum knowledge about what is balance sheet ,P&L &Cash flow statements of a company.
Another golden feature in ur varsity is newly added taxation topics by NITHIN,m quite sure no other brokers in India currently gives such a kind of back office ,here u named it as Q.
with every information a person needs regarding his trades,especially in tax related matters 100% sophisticated solution u r giving to clients .
Karthik,Hats off man,what a beautiful presentation by u on varsity..everything simple n perfect from ur side….* neglecting very few typo in accounting related topics.after my 10th std my study ended on 2001 when i completed my MBA ,
I can claim 95% books read by me for educational purposes by different author’s are making the learning process is quite complex and boring,
My bottom of my heart m saying u r a man gifted with extra ordinary writing skills…all chapters written by u in varsity are quite valuable..this is the only topics i read completely after my 10th std.ie now m@age of 38.aft 23 years.
Lastly , Congrats NITHIN for the efforts you put for tax related matters for traders and investors..and your New efforts started 5 months back through change.org for exclude business of trading in securities& derivatives from section 44AD.for trading community…
My only sorrow is that year 200I onwards I am working in this industry as dealer,Relationship Manager,Branch manager kind of profiles,currently running a franchise with another broking house..Till now i havent get such a chance to work with your kind of brilliant young team..
Please add work in progress modules in options and trading strategies also..with out much delay..
Pratheesh, I’m a bit overwhelmed reading you comment 🙂 Thank you so much for such kind words and encouragement. The idea is to ensure that over time we discuss each and every topic related to markets on Varsity. So please do stay tuned for more!
Btw, can you please point out to the typos, I’ll fix the right away 🙂
Hi Nithin. I completely agree with Pratheesh. He has expressed whatever has been in my mind for a long time. I’am regular varsity reader and I have made my entry into markets only because of varsity. Your Varsity initiative is fantabulous. Varsity has made it very easy for everyone to learn and understand about markets. There is a honesty and integrity in the writings and this is not like other people teaching about markets. I say varsity is unique. There is nothing like varsity available on this world wide web. Thank you Mr.Nithin for giving us this very very unique product. Slowly I’am progressing in trading activity thank you ZERODHA (Nithin, Karthick, and everyone in Zerodha) from bottom of my heart. Through me almost 7 to 8 people have joined Zerodha it seems I can make money through this can you please explain the process?
Anyways I have few questions about taxation (1) How are commodities trading taxed same like business income? (2) If I invest in gold etf then isit same as commodity trading? When is commodity module coming up in varsity?
Thanks Prabhu for the kind words.
1. Yes commodities trading is similar to F&O trading, non-speculative business income.
2. Gold ETF is not commodity trading, it is like trading stocks/mutual funds.
There are still a bunch of modules to finish. Btw, the technical analysis module can be applied for trading commodities as well.
1) Assume Pension+Bank int is processed in ITR1 for FY 2013-14.
2)Again assume that some speculative income and short term income is left- out in FY 2013-14.
My question is how to consider this left-out speculative income of FY 2013-14 during this FY 2014-15?
You cannot consider this for FY 14/15. What you can do though is to go back and file revised returns for FY 13/14.
If revised return is filed for FY 2013-14 now, does this invite interest on tax due?
Yes, it will.
If revised return is filed for FY 2013-14 now(after refund order issued by IT dept.)does this invite interest on tax due and whether revised return has ti be migrated from ITR1 to ITR4 or so ?
o
Thanks for your in regard to interest.Whether revision of ITR1 of FY2013-14 be made in ITR4 now ?
Yes it can be made.
Hello All,
IRT4 still unavailable on e-filling website. Does anyone have any information by when it will be made available and is July 31 is the last date for filing return even for ITR4?
Thanks,
July 31st last date is for ITR2(even that is extended to Aug 31st this year). ITR4 should be out soon, last date will be most likely end of september or even october as this year new ITR forms are being introduced.
thank u so much sir for giving me such important information. this questions were always on my mind. but now cleared
now i was doing trading and investment in market since 2005. i have traded through sharekhan and way2 wealth broker previously now doing trading through zerodha.
so what should i do for my previous losses as at the end of the each year there is no profit and having no records for that. but for current fy there may be chances of profit.
can i start to maintain records of transactions from now onwards since no back dated record available with me.
Ganesh, all back dated records (atleast for the last financial year) should be available with your brokerages. So make sure to file your returns for FY 14/15 and do it regularly from this year atleast.
what should we declare our nature of business?
i can find only as forex trader
You can declare nature of business as “Trading -others” code: 0204
Zerodha had made a trend set an is now a pioneer in the technology ,tools , and the knowledge sharing portal, simply awesome
Great work Nithin and Zerodha Team,
Good tools to name few ranging from Varsity,SPAN ,Margin,brokerage calculator, pulse,PI, 60 Day challenge,Quant,tradingqna,rowd cand so on ,expecting KITE soon ,I want to involve in alpha testing of the KITE is it possible ?
Thanks Saravanan, Kite is already available for trading. You can send an email to [email protected] to enable Kite for trading. https://kite.zerodha.com/ is the link. If you are enabled for Pi, you can login to Kite as well.
Thank you nithin for the reply
1. Actually I am a new user so my request is that if your team can then y dont you make a video of filling returns or about how to pay tax and also filling returns so that it benefits to all new users.
Thank you
2. Do we have to coleect any statement form from your office nithin??
Srikanth,
1. The idea of putting up this module was to make life easier for traders. Everything you need to know is already on this module. The actual filling of ITR form can be done in multiple ways, and it is best to consult a CA for this.
2. You can login to Q.zerodha.com and pull our tax P&L report and ledger statement. This is more than enough.
Hi Nithin,
Thanks a ton for such a great initiative.
I have a query. I am a salaried professional . Last year I opened my Trading+Deemat account mainly for the purpose of Long Term Investments. However, i also did a some Intraday Trading out of curiosity and eagerness to learn. In doing so I have incurred a loss of Rs. 1600 INR in those Intraday trade orders.
My question is that is it mandatory to show the Speculative Loss (Indraday) in my IT Return. What if i do not want to carry on the carry forward my Intraday losses? Can I file ITR1 in such a case where i do not carry forward my Speculative Losses? As the amount of loss is not huge i want to get around the hassle of going through CA Audit. Also, i do not have any Short Term or Long Term gain. Kindly let me know your thoughts on this
Regards,
B Sen
If you want to be compliant, you have to declare this as speculative loss in your ITR4.
Hello Nithin,
Could you please attach an sample filled ITR4 from previous years here to be used as sample? That will a great help to many first timers.
Thanks,
Bhushan
Bhushan there is a sample ITR4 in the above chapter. Click on this link.
This file some cells linked , where do I get the Linked file?
Kindly let me know.
Thank you
There are new forms this year. We will try to put out the new sample form soon.
First of all I thank Nithin and Karthik for the detailed explanation about taxation. It was indeed ver useful and almost answered 90% of the queries which I had about taxation. It would be very helpful if you could clarify on my below query . I had done intraday trading during March 2015 . My turnover is 2500 , where as my speculative profit is 1800. Should I need to use ITR4 for filing returns ? If so , my profit is more than 8 % of the turnover , is auditing required( as auditing is required only if the turnover is more than 1 crore and if turnover is less than 1 crore and profit is less than 8%) . Can ITR4 be filed without auditing ? As I have speculative profit I believe I should not use ITR4S . Kindly clarify and advise which form needs to be used . Thanks in advance.
Yes Bala, you will need to use ITR4. Yes, you can use ITR 4 without the need of getting audited. Yes ITR4S can’t be used as you have speculative income. Guess the module helped. 🙂
Thanks a lot Nithin. The article was really amazing and very much helpful. I appreciate your good work .
Sir, If income is below exemption limit and net profit less than 8% of the turnover; i am not liable to auditing (44ab), so i must select NO in the itr4 , is it right. Can you please tell who are required to maintain accounts as per sec 44aa? Thanks
Yes No in ITR4. Section 44AA is applicable mainly for professionals (doctors, teachers, architects, and others).
Wow Nithin! this is excellent work! A complete guide. Thanks a ton for this wonderful presentation!
One question NIthin on which I need your suggestion, If I have only short term capital gain in equity delivery trades and long term capital gain on some debt mutual funds, no F&O , NO Intraday, can I use ITR4S? since investment is the single source of income and no salary.
GB, capital gain can’t be declared on ITR 4S. Best to use ITR2, it is quite simple
Hi,
Just had a look at the new ITR 4 form. To an average joe, the form is pretty intimidating…..My only source of income currently is active trading in F&O. I want to show it as a business. But the balance sheet section of the form is very elaborate and it seems difficult for an average trader to prepare a “corporate style” balance sheet that this form supports. The P&L section also a very comprehensive (while it may be a good thing), it confuses us because i am not sure which fields are necessary to be filled.
Unfortunately, there are very few CAs who understand the “trading” situation correctly and give convincing advise. I wanted to do this on my own but now i think i may have to find and depend on a CA
Yep, filling up the ITR4 form is quite daunting. I think best thing to do would be to make a note of everything, and tell the CA that this has to be filled in ITR4, all CA’s should be able to do atleast that much.
oh Ok Nithin, thanks then. I happen to trade sometimes every other day in Delivery equity no F&O no Intraday.. That is why was not sure if I should classify them as short term capital gain or business income. since I dont have any other salary or business income. So from your answer I read it as it is fine for me to use ITR2. Kindly revert if my understanding is not correct.
You can use ITR2, but like you said if trading equity is like your primary business then yeah probably you should declare trading as a business. If you are doing so, then yeah ITR4S or ITR4, in ITR4S there is no provision of capital gain, you have to show it as business income itself.
Hi Nithin,
My trading account size is only Rs. 1,00,000, and I am not making a net profit annually at the moment, but I am still making some equity trades that have short term capital gains. I am confused, because I have no taxable income and hence I don’t need to pay any tax, but I have short term capital gains on some trades. Would I still be liable to pay the 15% STCG tax ?? Would really appreciate your feedback on this.
Murtaza, if your total income for the year (including all your other income + STCG) is lower than 2.5lks, then it not mandatory for you to file ITR. You will also not need to pay any taxes on the STCG. If it is more than 2.5lks, yes you need to pay 15% on STCG as taxes, and file it using ITR forms.
Thank you so much Nithin. Really appreciate your help.
I’m a full-time trader. I’m filling up the ITR4 form. Here are a few questions from me so far:
1) Balance sheet section (No Accounts case):
6a, 6b, 6c: Do I have mention ‘0’ for sundry debtors, creditors & stock-in-trade?
6d: Amount of cash balance – do I have to mention it? If yes, is it the net profit/loss? Or is it just the bank balance on March 31, 2015? Or is it the net total of bank balance & P/L?
2) P&L Statement (No account case)
53 a – What is the gross receipts? Is it the turnover?
3) I got provident fund payout from the company I last worked in, for the FY 2013-14, in October 2014. At present, since I’m not employed, what do I show this income as?
1. Yes
Net total of bank balance and P&L
2. This is upto how you want to declare. We typically show all positive turnover as gross receipts and negative turnover as Gross sales.
3. Provident fund payout is not an income but capital receipt.
Thanks a ton, Nithin. Your help is much appreciated.
In which section is capital receipt filled in?
Haven’t seen the new ITR4, but last FY under OI (other income) 5 (e) Capital receipt if any. Best to consult a CA for this.
Thanks for your reply, Nithin. I am taking a CA’s help now to file the returns. Oddly enough, he doesn’t know how to declare short-term trading (or FNO trades) as non-speculative income in the ITR4 form, so going ahead with declaring short-term trading as STCG. He said there’s no field/column in the form that says ‘non-speculative income’. Could you please tell me which section you use to enter the non-speculative income data?
:), not advisable to show F&O trading as STCG, too many notices have been getting sent by IT department recently. Check out the excel download of the sample ITR4 form above. It is non-speculative business income. Show the nature of business as trading-others (code: 0204). Show all positive turnover as gross receipts and negative turnover as Gross sales
Thanks a ton for your reply, Nithin. Much appreciated.
Nithin, could you please tell me the CA you consult? Is it a firm like cleartax or something? I tried to understand by looking at the sample ITR4 form to see how you declared short term trades (F&O, equity) as non-speculative business, but I couldn’t understand anything. The CAs I’ve come across don’t know how to show short term trades as non-speculative business. So I’d appreciate it if you could let us know about your CA.
Also, can you upload a sample ITR4 form for a pure trader (one who doesn’t have a regular job. Does only trading). It’ll be very helpful.
Will try adding another ITR4. Have friends who are CA’s, also the guys from Taxiq.in help us.
Hi
Am pensioner getting around 9k per month..
Sometimes i do intraday .
And i buy and sell stocks after few daus or month whenever i get profit.
Which ITR i have to fill ?
Profit i get is it stcg or comes under tax slab
ITR3. Yes STCG. Taxes you have to pay only if your total income is over 2.5lks. If you are over 60, then only if above 3lks.
ITR2. Yes STCG. Taxes you have to pay only if your total income is over 2.5lks. If you are over 60, then only if above 3lks.
Hi Guys
Really excellent and informative stuff all over varsity and I truly appreciate your initiative towards demystifying the subject of taxation.
Also, the patience and promptness that you guys show in clearing the doubts of us lesser mortals is commendable..bravo guys!!
Having said that, I myself have a some queries that I may be asking after going thorough the chapters few times, if I couldn’t find the answers. The first one is: Can I show a profit of more than 8% of turnover, even though I have incurred loss (or my profit is less than 8%), and pay tax by including that (>8%) profit in my income, to avoid the hassle/fees of audit by CA in “ITR4”; the way you said is possible in “ITR4S”?
Not possible in ITR4, if you want to show presumptive income it has to be using ITR4S.
Cheers,
Thanks Nithin 🙂
Some more clarifications pls:
1. As per my Q-reports, My intraday (Equity only) details- P/L: +5806.65 & turnover: 13174.65;
and my Short term trade (Again, equity only) details – P/L: -8685.60 & turnover: 493295.00. Now, if I show both of these under Speculative business income, I have a net loss and, hence, I have to get the audit done. Will it be acceptable to show only my Intraday equity profit & turnover for speculative income while showing my short term losses under Capital Gains and, thereby, avoid the audit requirement (as for my intraday trades only, audit conditions are not met)??
2. I also faced an auction-penalty for a short delivery on an intraday-trade. Under which type of trade details are they listed in Quants reports? Also, just to make sure, it will be considered under my P/L only right?
TIA 🙂
1. Yes, you are supposed to intraday as speculative and overnight trades as short term capital gains separately.
2. If you had an auction penalty, it won’t be captured on Q/QUant currently. You will have to manually add it on your P&L.
Ok…Many thanks again
So, the turnover and corresponding P/L, as per my Q-reports, do not include that auction penalty amount and are inaccurate, right??
And while accounting for that penalty manually, should I count it as an intraday PL (since the original order type was MIS) or as short term trade PL (as the settlement was actually made on T+3 day)??
Yes, the auction penalty amount will not be part of P&L. But they would be showing on your ledger. Yeah, you could consider it as a short term trade.
Thank you so much Nithin, for resolving all the queries patiently! 🙂
Cheers!
Hi Nithin
One last (hopefully) query regarding my short delivery please:
The quantity for short delivery was 150 (Take-EQ). On T+2, I received contract note for auction of 23 shares specifying the buy price and other charges(so no problem for these 23 shares). For remaining 127 shares, my ledger is showing a net debited amount of Rs.12518.96, under the heading “Squring-UP Adj for,TAKE-EQ 127 Qty”. Now, how do I breakup this amount into buy price and charges,as there’s no contract note available for these 127 shares?
There are no STT/brokerage charges in case of short delivery (atleast at zerodha). So you can divide the value by the number of shares to consider the buy price.
THANKS A TON NITHIN!!
I’m almost done with filling up my ITR4, just last two queries please:
1. In the “Amount of Cash Balance” section, in no-accounts case under BS, should I fill my trading account cash balance and/or PL (as on 31-3-2015)?
2. I have not paid any advance tax for my (speculative) business income, but I’m eligible for refund, even after including this business income in my salary income (as my employer has overpaid my TDS). Do I still have to pay self-assessment tax for that business income separately or will it be adjusted and accepted against that overpaid TDS?
1. Cash balance in your trading account + what is in your bank account.
2. It will be adjusted against overpaid TDS.
Thank you so much Nithin for your amazing help.. could file my ITR4 on my own just because of this awesome initiative and kind support of yours!! 🙂
Now I just hope that I don’t receive any notice by IT dept for wrong filling or something. But no matter what, it was a great learning experience and I really feel lucky to have stumbled upon Zerodha in the beginning of my trading career itself otherwise this could’ve well been a nightmarish period.
Thanks again..stay blessed Zerodha! 🙂
Hi, You have given a very nice explanation of all the tax rules. My turnover in F&O trading is less than Rs.1crore. But I have incurred a loss for which I want to claim refund. Do I need to get my accounts audited?
If your total income for the year ( F&O Loss + any other income of yours) is greater than 2.5lks, that means you will have tax liability and yeah will need an audit. You can’t really claim for refund, the loss you have made can be setoff against your other business profits, hence reducing the tax liability on the other income u have.
Thank you Nithin!
I have a question on filling taxes. Could you please tell me whether gains from commodity trading will be listed under capital gains or as gains from business?
I see there are mixed reviews online. Some say they have to be under capital gains and some say business as they do not have dividends. Please help me out here.
Last budged brought clarity around this. It has to be treated as non-speculative business income. Check this article.
Hi Nithin
I am Siddharth (NRI).Firstly I must say this is a excellent peice of work. Here is my case:
I have following incomes:
1. Interest income : apprx 72.2 K.
2. Tax free income:2.21 lacs
3. Deductions (80C,80D,80TTA) = 79321 & possibility to deduct 33k under 80 E
4. I have income from F&O profit :2.54 lacs (turnover is less thn 1 Cr.(script wise) and profit is more thn 8% ) and I have capital gain less thn 10 k.
5. Losses to be carry fwd : Business income 20 k and speculative business 57k.
Now my questions are:
1. ITR 4 or ITR4S? (Since 4 years I am filing ITR 4, still not sure!!)
2. Can I treat capital gain together with business income only, that is F&O profit.
3. I dont need auditing right ?
4. How should one tackle BS schedule for F&O income?Can I leave it black ?
Thanks in advance.
Best
Siddharth
1. ITR4
2. If you are considering yourself as a trader (check chapter 1), then yeah you can show capital gain as business income.
3. No
4. Since you don’t need an audit, you can mention “No-account case” in the BS schedule.
Do consult a CA once.
Thanks Nithin.
Even when I am in no audit case, I dont understand what should be filled in heads like amount of sundry debtors, creditors cash balance. I am doing F&O,its not a real business setup.
Also, till date I did not mention nature of business as trader. Because I was adding /deducting the profits and loss from my tution income. But now as I am not doing that any more,is it okie to change nature of business ?
Thanks in advance.
Siddharth, you can leave all those fields blank. It is best to get a CA fill the form for you, ITR4 is quite complex. Yes it is better late than never, do start declaring your trading income.
Hi, With respect to Non Speculative Loss whether we can’t carry forward the entire amount to next Ass. year (2016-17). In the current Ass. year (2015-16) my income (Rental & Bank FD’s) are less than my nil taxable income and I don’t want my Non Speculative loss getting offset with my current income.
You will have to offset all your business profits and losses, and only the net loss can be carried forward. So if you have 1lk rental income, and 2 lk trading loss, you can carry forward only 1 lk business loss to the next year.
Thanks for your reply. Without offsetting we cannot carry forward the entire loss even though my other incomes are less than tax slab?
No you can’t. So if your rental income is 1lk and trading loss is 3lks, you can carry forward only 2lks. You cannot carry forward 3lks, just because your income is less than min tax slab.
Hello,
What does this line mean in the above comment, ‘You cannot carry forward 3lks, just because your income is less than min tax slab’ ?
Thanks
If your income is 2lks and loss is 3lks. You can carry forward only 1lk. You can’t say that since first 2.5lks of income there is no tax, I want to carry forward entire 3lks.
Hi,
Do I need to enter the details of each and every trade with buying date and sell date for each stock while filing the income tax return?
No, just the overall P&L.
I have salary income of apprx 600000/- and tax is already deducted by company for rs. 15000/-. Further, i have an income from delivery based equity transaction of Rs. 12000/- (Total buy value – 530000/- and total sell value – 542000/-) and Loss from intraday trading of Rs. 17500/- (Total buy value – 1,29,00,290/- and total sell value – 1,28,82,800/- )
The above values are derived from the statement given by my broker on the average buy and sell rate basis.
I have following doubts :-
1) For delivery based – Do I need to show the income of 12000/- as income from capital gains ?
2) For Intraday – Do I need to show the loss under the head “income from buss/profession” ?
a. Should I consider the turnover equal to the loss I have suffered or is there any other way to calculate it.
3) Which ITR form to be used ?
Please suggest..i have done share transactions for first time and now confused with how to treat profit and loss of in filing returns?
Do read all the chapters of this module.
1. Yes as capital gains.
2. You have a head called – Trading/others. All positive turnover can be shown as receipts and negative as sales.
Check the chapter: http://zerodha.com/varsity/chapter/turnover-balance-sheet-and-pl/ on how turnover can be calculated.
3. ITR4
Can you tell me..do i need to have an audit ?
yep
Hi Nithin,
Please help me in calculations :
Salary : Rs 1500000
Rent Income from Flat : Rs 90000
Interest (SB) : Rs 20000 (after deducting standard Rs 10000)
Intraday Equity Trading (Speculation) : Rs 100000
Short Term Very Frequent Trading : – Rs 50000 (Loss).
Now questions and confusions:
1. Can I consider Short Term frequent Trading as ‘Non-Speculative’ ( as mentioned in your module)
2. Can I offset these Short-Term (if Considered as Non-Speculative) with Intraday (Speculation) and other income heads , means:
Income Other Than Salary = Rent + SBInterest + Intraday(speculation) + Short-Term(consider as Non-Speculation)
= 90000 + 20000 + 100000 -50000 = 160000
3. As per your module , Non-Speculative Losses (Short-Term Trading Frequent) Can be offset with Speculation + Other Income.
Please help and guide me here , I am little bit confused.
Thanks
Ashu
1. yes you can.
2. You cannot offset non -spec loss with spec gain, they have to be kept separate. But yes, you can setoff against other income (other than salary).
3. No, I haven’t said anywhere that you can setoff with non spec losses with spec gain. But yes you can against other business income (like rent etc).
My net loss is from F&O trading. STCG is from shares.
Sorry, my F&O net loss is not getting set off against STCG as I mentioned earlier.
In CYLA schedule this F&O net loss is getting set off against income from other sources (bank FD interest). Is this right or am I missing something? Since my total income is below 2 lks, there’s no point in having it set off this year. I want to carry forward this business loss and not have it set off this year itself. How do I do it?
For my F&O trading I have filled up only P&L under No accounts case: Gross receipts 110,000. Gross Profit 52000. Expenses 7000. The resulting net profit is calculated automatically and shows in BP schedule under A1 and other places automatically. Haven’t filled u anything else. What am I missing? Why is the F&O loss getting set off against current year’s Bank FD interest of 70,000 instead of getting carried forward?!
Lakshmi, you can carry forward only net business loss (after adding all your income). You cannot choose to ignore one income because the current year you are in a non-taxable slab.
Much thanks for your reply… So, net loss in business has to be mandatorily set off against income from other sources in the current year itself? Does it also get set off against salary income, income from house property or capital gains?
Not against salary income or capital gains. It will offset all business income like rental, interest, and etc.
Thanks again for your response. Appreciate it a lot.
So if I do 3 small F&O trades, my F&O loss will be treated as business loss and all business tax laws will apply but it will happily get offset against my personal bank FD interest (FD made many years prior to starting this ‘F&O business’)!
…..I think it’s not true that laws don’t go beyond common sense 😉 Income tax laws do. And then some!
Considering that more and more retail investors are getting into derivatives, the govt should introduce separate tax laws for derivative trading instead of lumping and dumping it under business, just as there are for capital gains.
Hello Sir,
Thanks for your valuable help. I have salary income after all deduction is Rs 220000.00 + STCG (Sale of shares) Rs 27000.00 (profit 30% of money invested) and Speculation loss (Intra-day Trading) Rs-4000.00. Which ITR form should i Use??? DO in need any aduit for the same as well???Plz Provide ur guidance as I am very confused…
Few things I Forget to mention that I am an INVESTOR not TRADER in share market And my Total Salary Income is 380000 (Excluding any deduction). And if i supposed to fill ITR4 then in which section I can fill Speculation Loss .
hmm.. don’t know how cleartax will be able to do this. But yeah, in ITR 4 sum of all profits can be mentioned in gross receipts and sum of all losses in gross sales. Your net loss will be loss – profits.
Intraday trading is speculative business, since you have business income you will need to use ITR4.
Hello Team Zerodha, I have been trading with you for more than two and half years and have never bothered to look for any other broker. After having read (and also understood thoroughly) your entire module on taxation, I have no words than to mention “just fantastic”. All the best to the entire team for the exponential growth of Zerodha Customers. I have two basic questions, answers to which I think I know but yet not confident so asking again. 1. Sum total of my income from other sources (only from interests and dividends, no salary, no capital gains, no other business income and no house property income) and losses from FNO works out to be less than 2,50,000. I think I must file ITR4 and I dont need Audit. Am I Correct? 2. What should be mentioned under the heading “Nature of Business”. I find that only “0204 Trading-Others” seems to be the right option. Can you please advise?
1. Yes you need ITR 4. If you have no tax liability (all ur income combined less than 2.5lks), no need of an audit.
2. Yes, that should be the nature of business, mentioned in the chapter above.
Number One service and Good Knowledge given by you.
1)I have traded in only in Options in f&o, with a turnover of 2lakh and a profit of 13000, so can i go for ITR-4S. I will pay extra tax(profit less than 8%) rather than go for audit.
2) Next financial year can i go for ITR-4 if i am have any loss or profit to show expenses plus audit.
1. Yes.
2. Yes.
Do consult a CA.
Hi Nithin, thank you for such an informative article.
I have a few questions if you don’t mind. I earn only from my websites by showing ads. My total receipts for fin year 2014-25 were 15.4 Lakhs.
1. Can I use ITR 4S, as I am not a Professional and merely selling traffic.
2. In ITR 4S will I have to declare my income as 8% of 15.4 Lakhs. My profit is around 13 Lakhs. So is it up to me whether I declare 13 lakhs or 8%? And is this legally okay if I declare 8%?
3. What to enter in “Amount of the cash balance”? My business is online so there is no cash-in-hand, everything is in the savings account. Can I leave it as zero?
Syl, we are trying to keep the focus in this module on taxation while trading on the capital markets. Don’t want to digress from the topic.
Best,
Well can you atleast answer ques 2 and 3? I wouldn’t be asking you to, if it wasn’t really important. The last date of filing the return is tomorrow and I would really really appreciate you help with just those 2 questions.
ITR4S excludes businesses like commission. Also it is never a smart idea to take a route that can cause a loss to IT department. In your case, you can’t really declare 8% of 15.4 as profits, because ur actual profits are probably the entire 15.4lks (minus the expenses). For example in your case, for 15.4lks ur tax liability will be 2lks + as per the IT slabs. But if you declare only 8% of 15.4lks as profit, u would have to pay no taxes. So best not to do this, if IT dept has a problem there will be a 1% penalty per month on tax not paid.
ITR4S was meant for small traders, grocery shops etc, who had very little income. Govt tried to make it easier for them to file returns.
Cash in hand is cash + money in savings bank
Dear Nithin Sir,
Iam very much appreciating the interest you have shown in updating our knowledge and understanding on Taxation for trading activities through Varsity. With this understanding, I have filled my ITR sucessfully( 1st time) with in a short span of time by including all my trading income. Thanks a lot!
My best wishes for the expanding sucessful future of Zerodha!.
Regards,
S.Lawrence
Dear Zerodha,
I am a Insurance advisor(self employed) and having commission income(4,67,000) and I am a regular F&O trader in zerodha, Now for FY 2014-15 I have incurred loss of 1.5 Lakhs and my total turnover as per p&l statement is 14 lakhs. I want to know which ITR form should I use, Does tax audit required? and I want to carry forward the loss. As I am planning to declare the loss for the first time. I tried contacting many CAs and other friends. But unable to get the complete clarity. As tomorrow is last date for filing and in case of loss carry forward. Kindly provide me suitable solution ASAP.
Nagaraj, just answered on Zconnect:
You will need to use ITR 4. Ur total business profit (commission – trading loss) seem like it is more than 8% of turnover. So u will most likely not need an audit. Check this module:http://zerodha.com/varsity/module/markets-and-taxation/ explains everything. Best to consult a CA.
Nitin sir, thank you so much for your kind reply. But can you clarify that on which head in itr4 i need to declare this loss and adjust with the my commission income. will it come and LTCG, or STCG or any other head. My local CA seems to be in confusion state. See if you can help me out. Thanks in advance.
F&O trading is business loss/gain. So same head as you would mention any other business profit/loss. If your CA can’t figure that out, hmm.. probably u should use someone else. Check out the sample ITR 4 in the chapter above.
thank you sir
Nithin, you have done a commendable job on this section. Cleared lots of confusion. Keep it up.
Regards
Hi Nitin,
I am a government servant. I have invested in equity. How long I should hold a bought share so that I did not involve in trading as government servant…
It depends on which department you are working in. But as long as you are doing delivery based trading (buy and hold for more than 2 days), it shouldn’t be an issue. But do confirm once.
Nitin, thanks for your kind reply. I keep buying shares for long term. During filing of income tax, should I consider value share while I bought or the value of share on last date of financial year?
You can consider at the price you bought as u r an investor.
Hi, my audit is going on. My CA’s team asked me to calculate the month wise profit/loss for the audit. While doing so I have discovered a thing. In the 1st quater of FY 14-15 (i.e April 14-June 14) I had a profit of Rs. 54000. I have a total loss of Rs. 6,78,000 in FY 14-15. I was in a job till August 14. My question is that was I liable to pay any advance tax due to the profit in 1st quater even though I had loss in complete FY. I havent paid any advance tax for the shares as I didnt know and at year end I was at loss. Am I at a non compliance cause I didnt paid advance tax even though I had loss in FY?
Ankit nothing to worry about. Speak to your CA about this, he will be able to take care of this.
i am holding nre deposits, ( before i invested for 5 years/ 10years, 3 years back i came back from abroad. ther interest earned on deposits are taxable? ( since i invested when i was nri ). if so on which section?
NO taxes on interest earned on NRE deposits.
pl mention section, my auditor is not accepting since i came 3 years back, he said (even thou i invested when i was nri), ur income is taxable. but as per u my income is not taxable. pl mention under which section? so that i can refer and try to convence him. how many years i can hold this deposits.
Ah my bad, didn’t see the “I came 3 years back, in ur previous question”. I thought you were still a NRI. If you have returned back, more than 2 years back and/or if you weren’t a NRI 9 out of last 10 years, you will be considered as an ordinary resident and taxes has to be paid on all income.
Hello Nithin,
Thank you so much for your articles and your hardwork. I get motivated by seeing your hardwork and achievement so far.
I have a small query, as per your responses it means that if we are in a net loss at F&O, we can either use ITR4 or 4S based on minimal of both of them ( If total tax is less than 15k then presumtive tax else pay the CA 15k), Am i wrong?
Also why is turnover considered and not net loss instead? I have a total turnover of ~18L, but the net loss is <10k.
So in this case you would suggest me to hire a CA and pay 14k instead of paying 10% of 18L as presumtive tax
Regards
Thanks Jayesh. Using the presumptive income route is not advisable. But yeah, if you have turnover of 10lks, you can show 8% of 10lks or Rs 80,000 as profit and pay tax as per the IT slab you fall in on that. If your turnover is less, then yeah, ITR 4S could be the route, otherwise best to use ITR4.
Why is turnover considered? 🙂 IT department considers you like any other business.
Thank you so much, But what would you suggest me in this case,
Since its a loss of 10k with trunover of more than 10L
wouldnt it be 15k(Audit charge) + losses=> 15k-10 for ITR-4
and 80k for ITR-4S
Please help?
Regards
Else it would be 80k right?
Regards
You could show 8%, so yeah 80k for 10lks turnover as profit. Add this 80k to your income, so if you are in the 30% bracket, you pay 24k as taxes. Your rather just get the audit done paying 15k to the CA and also get to carry forward the loss to future.
Thank You so much Nithin
Last year AY 2014-15 I filed ITR 4 with help of a CA. I told them to do audit. They said not required and filed ITR 4 alongwith my salary details and loss of 13 L in F & O. It was processed and did not receive any defective notice. But this time AY 2015-16 the same CA filed in the same manner with loss of 2.5 L. But received defective notice with error code 32. Please suggest me. What need to be done. Thank you.
You have to get your ITR audited, and rectify the returns.
Sir,
Am a software employee and i have been trading for more than 5 years ini FnO. But i never goot profit and never filed taxes. Can you advise me what to d now.
Regards,
Ashok.
Ashok, if you haven’t filed yet, best to start now. If you haven’t evaded taxes, there is no need to worry.
Hi if i take some funds from family n friends n give back after some time say 1 year or more by giving some returns is it good i take cash or by bank transfers how will i be able to take in to taxing part will i be having some extra care how to go about this give some idea
Taking cash is not advisable. If you take cash and put it in your bank account, how will you account for the source of income?
You can borrow money as a loan, and then probably move it to your trading account (again not advisable because it will be like doing portfolio management which SEBI bars any unregistered entity to do). In terms of taxation, nothing much changes for you or your friend. You borrowed money, and u r returning it with an interest.
Hi Nitin
My Question is regarding ITR 4S. What if my turnover is 80 lakhs and my profit is 30 lakhs (as per the Tax P&L on kite)? In that case can I still show my income as 8% of 80 lakhs? Which just turns out to be 6.4 lakhs. Am I compliant if I do that? Obviously I can voluntarily show the income is 30 lakhs and I am more ethical by doing that. But my question is not about ethics over here. My question is that by showing income as 6.4 lakhs, Am I compliant?
There are 3 main benefits of doing that
• No tax audit
• No book keeping like P&L, Balance sheet etc
• And last but not the least, I am not paying tax on 30 lakhs but only on 6.4 lakhs
From your example and of what I have googled, it looks like I am compliant but it will be great if you clarify. Mind you, I am more interested in being compliant rather than being ethical. I want to pay all the taxes that are officially due, but also save as much as I can without being non-compliant.
In fact this example can apply for any high margin business. Like I buy small screws at 10 paise and sell them for 90 paise. Hence at the end of the year my profit would be 80 lakhs on a turnover of 90 lakhs. Can I just show may income as 8% (7.2 lakhs) and file ITR 4S?
Frankly I strictly believe that we should all pay taxes, but what I don’t understand is why do I need to take an effort for something that the government earns. They should give me an IT officer who will look at my trading activity and compute the tax as relevant. Why should I pay even pay Rs. 100 to a CA, only to make sure that the government earns its revenue correctly? 90% of the individuals would not know how to make a Balance sheet or a P&L. Me being from commerce background, I don’t know how to keep these books. You will agree that even after the guidance from yourself, practically making P/L, Balance sheet is not easy, especially when it’s in a particular format like probably in ITR4 format. my query is specially for F&O
Albeit, undoubtedly the tax guidance that you have given on Varsity is invaluable and so much of help. I do not really have words to express thanks to you and the way you do the business. What you have done over past few years will really work like a benchmark for other brokers. I have seen that sometimes the progress is slow, but you as a broker have explored avenues that none other have. All other brokers are interested only in the broking income. I really admire people who create wealth not just by doing the business, but also by creating a lots and lots of value for their customers. Nitin, you are one of them. I think there are currently two firms which are really doing well in terms of creating value for their customers, one is Ola Cabs and the other is Zerodha. Hats off to you, guys….
It will be great if you can answer my question about ITR 4S…I want to be compliant and still not pay too much of tax!!!
PS. I have already mailed you to let you know how fab your kite platform is…
Rohan, thanks for all the kind words.
Coming back to ITR4S, hmm.. it is a loophole in the system and yes you can technically pay only 8% of the turnover as taxes. The issue though would be in case of a scrutiny (chances of it happening is 1 in 100), if the ITO realizes that you have taken the route that has caused a loss to the exchequer, hmm.. he might demand for the difference in tax and interest for the period it was not paid. So I’d advise you to file using ITR4 itself, ITR4S is suggested only if someone has done really small amounts of turnover and is required to do an audit.
Thanks Nitin. Frankly I wouldn’t really worrry about scrutiny if I have followed all the prescribed rules. This was really of help,Nitin. Thanks again….
thank you for these wonderful articles
Hi kartik
If my profit is turnover is less than 1crore and profit more than 8% from f&o only,then simply I can final tax at end of year using ITR4S without auditing and without paying advance tax
Yep, you can also use ITR4 itself and there will be no need of audit.
Hello Nitin,
Is 80c deduction (1.5 lakh) available for speculative business income and non speculative business income? I know 80c is not available for short term capital gains.
Thank you for informative module on Taxation.
Thanks Sunil, yes 80C deduction available against all business income – speculative or non-speculative
Nitin sir thank you for simplifying everything.
Sir I have lost more than 18 lacs out of which 10 was taken from friend as a loan which form I need to fill and do I need to do an audit
And it was in option trading
You will have to use ITR4 Maddy. If you have a salary income outside this for which you have to pay tax, then yeah do get yourself audited. If you don’t, then not needed. Do speak to a CA.
Thank U Nitin sir for reply as well as creating such a good and affordable platform for trading I will add more clients to our list by mouth publicity and I am still positive on the market I know I paid the high price for my lessons but that will lead me to consistent income because after evaluation now I know what not to do
One more thing I am self employed small florist i started filling ITR I just want to ask is my losses will get carry forwarded for eight more years
Mandar to carry forward losses you have to declare them on ITR4. Thanks for the good word.
Thank U sir
धन्यवाद आपले आभार नितीन सर
Thank U Nitin sir I forgot to login so Mandar is me maddy@111
And once again i would like to thank all ZERODHA TEAM because of U I will be wealthy more faster U CHARGE SO less I am lovin it and service with no compromise like Pro
do i need to do something with my current 14-15 ITR beacuse its not fillied yet and 13-14 business income is less i mean i paid 10000as tax
Yeah, if you have made a loss in 14-15, best to declare it using ITR4
Hi sir iam a small trader, i tried to trade in options few month 2 months back, now iam not doing it, if i see my P&L statement it is showing profit 3000( three thousand ) and turnover 300000 (three lakhs)(since most of the times i made losses), since overall iam in profit only , so do i need to pay tax for this small amount?? if yes since my profit is far below what needs to be done sir? if i go for ITR 4s i need to pay 8% of my turnover 3 lakhs which is far greater than what i earned, , if i go for ITR 4 auditing is required which again requires lot of money i guess , please advice me in this sir thanks in advance
If you use ITR4S, you show profit of 8% of Rs 3lks which is Rs 24000. Taxes on this will be based on the IT slab you fall in, if in 10% slab, you will have to pay Rs 2400 as taxes. But it is best to use ITR4, even in ITR4 you can just show 24000 as profits instead of Rs 3000 thus avoiding an audit. Speak to a CA once.
Could you kindly tell that in ITR-4S, in schedule NOB BP, what is the nature of business for future and option trading?
0204 trading -others.
Thanks.
Shop act license require for Non-Speculative business ?
Hello Nithin Sir,
I might have a situation and believe you can provide me appropriate guidance. I have made several visits to CA’s in last few months with not very clear response. I’m an independent IT consultant. Last year I earned 5.4 Lks in professional fees (Income tax code- 194J) before TDS deduction. And my estimate for this year will be 6.00 Lks before TDS deduction. I filled ITR-4s form last year and intends to do the same for this year too.
Now here is the situation, if I do intraday trades and make small profits let say 8K.
1. In such case, under which head my Income from intraday trading will fall?
2. Which ITR form shall be most applicable ITR-4 form or ITR-4s?
2. And do I need to prepare books of accounts?
3. If so, which are the major books I need to maintain like Journal entry, General Ledger, Trial Balance, Profit and Loss, Balance sheet etc.? 4. And do I need to get those accounts audited by CA?
Kindly help
1. Speculative business income.
2. ITR4, you can’t show speculative in ITR 4S
3. Just general ledger and balance sheet should do, P&L would anyways be provided by the brokerage.
4. Audit required if turnover more than 1 crore for the year or if profit less than 8% of turnover. Check this chapter.
Thanks very much Nithin sir for clarifying things out.
And just to confirm, as per Chapter 6.2 at link provided by you.
Turnover means ALL BUSINESS TURNOVER, and
Profit means NET BUSINESS PROFITS.
So, the ITR return should looks like:
Case 1:
Professional Fees 5,40,000
Intraday Tunover 1,25,000
Gross Turnover or Gross Receipts: 6,25,000
Income from speculative business: 8,000
Less: expenses (phone, car, meal, internet, brokerage, STT) 2,50,000
Net Profit = 3,83,000 (61.28% of Tunover)
Case 2:
Professional Fees 5,40,000
Intraday Tunover 1,25,000
Gross Turnover or Gross Receipts: 6,25,000
Income from speculative business: -8,000
Less: expenses (phone, car, meal, internet, brokerage, STT) 2,50,000
Net Profit = 3,67,000 (58.72% of Tunover)
In both cases ITR4 be used and i’m assuming since Net Profit is greater than 8%, an audit should not be required. Though I have to maintain General Ledger, and P&L (consolidated with broker provided trading General Ledger, P&L). Am I taking it in right direction?
Yep ITR4 and audit not required. (For professional income, ITR required if turnover more than 25lks). Yep you are right.
Hello Nithin Sir,
Just wanted to say thank very much you for outlying the “complected” tax matter in plain and simple language.
And out of curiosity would like to know, what if someone decides to make share trading as his/her full time business. What registration number (service tax number, sales tax number etc.) shall be most applicable for setting-up sole proprietorship firm?
Thankfully you don’t need any of those registration numbers. You just have to use ITR4 and file your returns as a business. 🙂
I have got rental income and income from bank FD which form i should to file
ITR2A
When the next module will come?? Eagerly waiting for the same…
Hopefully by mid March the next module should start.
Hi kartik
If my turnover in f&o is 98,00,000and my profit is more than 8% of it. Clearly I should use ITR4S in which 8% of turnover =8,00,000 for which tax comes out to be 60,000 as per slabs. So I use challan itns280 and mode of payment would be???
I think here is no need to pay advance tax
Please correct me if I wrong any above. I made screenshot attached.
Hey Khyati, it is best to never do anything that can cause loss to the IT department. Calculate taxes in both ways, using the normal IT Slabs (without taking turnover into consideration), see your net profit and see what slab you fall in. If the tax is more than the Rs 60,000, best to not use this loophole of getting away declaring 8% of turnover as profits. Also use ITR4.
ITR4S is suggested only if your turnover is very small, and if you are having to unnecessarily having to get your books audited.
Hi Nitin,
Thanks for your answer.
I have no problem for paying taxes of my profits on trading f&o.
I simply don’t want get involvement’s like paying advance tax or going to CA to audit books.
Is there a way to pay taxes on profits simply on the end of year???
Trading is considered like any other business, if you are profitable you have to pay advance tax. If you don’t pay advance tax, you need to realize that you will be causing a loss to the govt. So it is best to pay advance tax, I have explained how here http://zerodha.com/varsity/chapter/taxation-for-traders/. You don’t need a CA for this. Going to CA to audit books is again a mandatory requirement if your turnover is more than 1 crore or if profit less than 8% of turnover in case turnover is less than 1crore.
please continue varsity initiative……plz
hello sir I am a psu bank employee so i have salary income bank fd income rental income and i also did some f&n trading in which i have incurred some loss so which form should i fill? as i am in psu bank employee is it ok to fill form itr4? plz guide me…thanks
You will have to use ITR4, no issues to use ITR4 as a bank employee.
sir,in 2014-2015 i have shown a loss of 24000.00 from non speculative business.
this year my income from pension,rent of the house is Rs5 lakh and 9 thousand.no profit or gain from non speculative / speculative business this year.
how can i claim the 24000 loss of last year and what shall be my tax liability this year. i have already made 1.5 lakhs tax saving investment this year.
Usha, business losses carried forward can be offset only against other business gains. You can’t consider pension or housing rental as a business income. So ideally you can’t claim the Rs 24000 loss.
* QUESTION :
Sir,
I am an advocate by profession, I file my Income Tax Return regularly in form ITR 4S. I file NIL return every year. During the Financial Year 2015 – 2016 ( A.Y. 2016 -2017 ) along with my legal profession I have started doing commodity trading in MCX ( Non – Agriculture i.e. CRUDEOIL ) . During this F.Y. ( 2015 -2016 ) I have incurred heavy loss in MCX commodity trading of around Rs 150000/- , I have gained around Rs 2500/- till date but overall loss till date is around Rs 150000/-.
I want to know the following things regarding filing of ITR for the A.Y. 2016 – 2017 :
1. In what form should I file the I.T return ITR 4 or ITR 4S ?
2. Under what category should I file the I.T. return Business or Profession or both Business & Profession ?
3. Will I get any benefit of the loss that I have incurred during this F.Y. 2015 – 2016 while doing commodity trading in MCX ?
4. If I would have gained money in overall MCX commodity trading at the end of the year apart from the loss that I have incurred during this F.Y. 2015 -2016 then on what basis I would have filed my I.T. return ?
i. On the turnover of the trading during the F. Y. 2015 -2016 ? If turnover then how to know / determine the turnover of the whole year ?
ii. If on the total income of the F.Y. deducting the loss incurred , then will I show the total income of the F.Y. or 8 % of the total income of the F.Y. or anything else , please advice ?
5. Till date no T.D.S. has been deducted from my trading income, I want to know when does T.D.S is deducted when the MCX trading income exceeds Rs 20000/- P.A. or more ? OR No T.D.S is deducted whatever may be the total income P.A. during a F.Y. , Please inform ?
At present my source of income is from legal profession and MCX commodity trading only , please answer my queries in my e-mail i.d. [email protected] so that I can e-file my I.T. Return properly without any error, so that I will not face any problem in future.
Thanks & Regards,
Debasish Naik.
1. ITR 4 is always preferable. But since you have done only non-speculative business (F&O trading and not intraday equity trading), you could also use ITR4S. But with ITR 4S you cannot carry forward the loss, so best to use ITR4.
2. Business and profession
3. Yep, if you have any other business income (not ur lawyer or professional income) you can set it off against it. Or else you can carry this forward for next 8 years and set off against any business gains in the future.
4. I have explained this in detail in this chapter. Make sure to go through the module once.
5. There is no TDS deducted, you will have to file all taxes yourself.
Also best you get an opinion from a CA as well.
I am an Individual. I have regularly submitted ITR 4. But I have not submitted my ITR 4 for AY 2015-16. Please tell me can I submitted ITR 4 for AY 2015-16. Please tell me one more thing, Now I want to submit only ITR 4S, Can I submit ITR 4S, Now? Please help me?
Yes you can file delayed returns. The only issue would be that you will not be able to carry forward any losses if you have in AY 2015/16
In the financial year 2015-2016, I have income from the following sources
1] Income from salary
2] Income from other sources
3] 1 running Recurring account
4] 1 Blue chip Mutual fund account
5] Intraday equity loss
6] Delivery Equity loss
7] Interest from bank account(less than 10000)
My questions are
a] As I have done intraday trading so I need to file ITR 4. Is it correct?
b] If I need to file ITR 4 and under which head, I need to show
i) Income from salary
ii) Income from other sources
iii) Intraday equity loss
iv) Delivery Equity loss
v) Interest from bank account
c] Should I need to calculate amount of interest accrued till 31st march, 2016 for Recurring account and Blue chip Mutual fund account since they will not
be matured 31st march, 2016.
d] Do I need to go for audit as I have loss in both Intraday equity and Delivery Equity?
e] If I do not trade(Intraday equity) in the next year but do Delivery Equity then do I need to show losses in equity intraday?
f] Which ITR form do I need to file in the next year if I stop Intraday equity? Can I show it as investment in the next if I only do Delivery Equity?
a. Yes
b. Nature of business can be mentioned as: Trading-Others (Code: 0204)
c. It depends on how you are maintaining your books. It can be on accrual basis or when cash realized basis. Best to do it on accrual.
d. Yes, since you have losses on intraday equity. Delivery equity if showing as capital gains, no need of any audit.
e. Yes,best to show.
f. YOu can use ITR2 to show capital gains only.
Please update it to reflect budget 2016 changes.
Hello Nithin,
I am salaried person. I trade using my wife’s demat/trading account.
1) Do i need to include gains/loss from this account into my salaried IT return?
2) If i buy/sell YES Bank 2 futures lot per day, my turnover is 25 lacs, so 2 crore limit is not applicable for me. is that right?
3) If i have to include gain/loss from wife’s account into my IT return, then what is my nature? Trader/Investor? what forms do i need to file?
4) If not above case, then What will be my wife’s status? Trader/Investor?
Thanks in Advance.
Aniruddha
1. No. You have to file IT returns separately in her name.
2. Hey go through the chapter on turnover. http://zerodha.com/varsity/chapter/turnover-balance-sheet-and-pl/. Turnover is not what u r saying.
3. U can’t include hers. U have to file separately in her name. U can use ITR4.
4. Trader, if trading in F&O
Thanks Nithin.
Your answer helps a lot
Hello Nithin,
Last financial year I incurred heavy loss as below
Intraday gross profit₹30,540.60
Intraday turnover₹30,540.60
Short term gross profit₹-1,20,854.30
Short term turnover₹57,13,725.90
Total Charges₹18,216.40
Futures Gross Profit₹-2,89,122.50
Options Gross Profit₹-24,273.75
Total Gross Profit₹-3,13,396.25
Futures Turnover₹5,11,637.50
Options Turnover₹1,33,503.75
Total Turnover₹6,45,141.25
Total Charges₹36,446.82
1. Which form is better option for me: ITR4 or 4S
2. How can I carry forward both these losses
Use ITR4, only if use ITR4 can you carry forward the losses.
if you are unemployed and non-salaried person but a full time time trader, which form do you use?
ITR4
Hi Nithin,karthik n zerodha team, I am eagerly waiting for other modules where I am unable to find anything. For ex: Commodities, Currency, IR Fut, Trading Psychology, Risk mgmt., and Trading Strategies. Also, please advise any other source which you think would be helpful to learn these modules.
I have to confess, all the existing modules are very well written which seems useful to novice and seasoned trader/investor. Thank you guys.
Best Regards. Ankit
Ankit – thanks for the kind words. We will start working on ‘Commodities, IRF, and Currencies’ module in about 15 – 20 days. Request you to stay tuned. Cheers.
I do plan to consult a CA, but the problem is so far the CAs I have encountered just don’t know how to enter the details of short term trades as non-speculative income or how to enter F&O income and turnover. I’m purely a trader, I have no other income.
All I seek is this: Which entry goes where in the ITR4 form. As in, the schedule and section number. If you can provide me these details, I can finally tell the CAs what I’m looking for.
Here are the details of my FY 2015-16:
Interest from savings bank & Infra bonds: 12173
Total dividend: 14189.25
Total intraday losses: (25604.4)
Total short term trade profit (to be shown as business income, not STCG): 70221.6
Total futures profit: 10307.5
Not traded in options
Total capital gains: 74554.51
Total short-term trades turnover: 1929948.20
Total intraday (speculative) turnover: 52684.40
Total futures turnover: 71107.50
Total trading expenses (Brokerage + STT + service charge + turnover charges + Stamp duty + SEBI charges) in futures: 17571.85
Total trading expenses (Brokerage + STT + service charge + turnover charges + Stamp duty + SEBI charges) in short term trading and intraday: 22760.26
I couldn’t get the separate expenses for intraday and short term trades from Zerodha records. The records show the charges together. Is it necessary to show the speculative and short-term (business, not STCG) expenses separately? If yes, how to get the separate info from Zerodha records?
I will be very grateful if you could fill out a sample ITR 4 form with the above details. It will be very helpful for pure traders like me who have absolutely no other source of income.
There is a sample ITR form filled in the above chapter, check it out. The link above Key takeaways from this chapter. About charges, currently intraday and short term are combined. We will this year give it to you separately. You will have to proportionate to your trading turnover reduce the charge from total charges. If you are showing it all as business, you can show charges combined.
Thanks, Nihtin.
Hi Nitin,
Excellant information. I’ve query on taxation on selling of shares in below scenario.
For Ex: I’ve 100 shares of ABC of 10 Rs each so my invested amount is Rs 1000. Now after a month the share price of ABC becomes 15 Rs. Now I decide to sell 6 shares which is 900 Rs and I’ll keep remaining 4 for more than 1 year. So I want to know whether this comes under taxation? Appreciate if you can explain.
Yep, on the first six shares you made a short term capital gain of Rs 300 (assuming u sold 60 shares@15). On this Rs 300, 15% has to be paid as tax.
Ok and what if my source of income is only from selling shares and my total profit earned for a year doesn’t cross 2.5lakh which is tax limit? Do I still have to pay 15%?
No, not required if your total income is less than 2.5lks.
Thank you
Hi Nithin,
I am using ITR4, have filled the P&L sheet, i am filling point 53 , is this be appropriate ?, besides this i have income from property as rent, here, i need to show brokerage paid to estate agent, in which point i can show this.
Regards,
MSP
In case of rental income, there is a standard deduction of 30% you get (including brokerage and everything else). So if you have 1lk of rental income, you pay taxes only on 70% of this.
Sir,
Why a deduction of 30% ? Is it because of the estate agent? Or someother reason?
Thanks.
Hi Nitin,
Thanks, ITR4, p&l sheet, which point needs to be filled for f&o income .
Regards,
MSP
Check out the sample ITR4. You can show positive turnover as gross receipts and negative turnover as Gross sales. F&O income will be receipts – sales. Check out all the chapters.
Hi Nithin,
I was filing return in Thane(Mumbai) ward, now i am shifted to Kerala and executing trade from here, however, my permanent address belongs to Thane, hence, which ward or circle i should mention Thane or Kerala
Regards,
MSP
If you have moved to Kerala for long term, it is best to change address. Otherwise, you can continue to use the Thane address. If in case of any scrutiny, you can appoint an authorized person (your CA) to represent u in Thane.
Hi Nithin,
My Future realized profit is coming -135140.75, in p&l sheet , where this amount has to put.
Regards,
MSP
You can mention all profits in receipts and all losses in sales. So if you had Rs 100 profit and Rs 200 loss, mention Rs 100 in receipts, 200 in sales, so net sales will be Rs 100 which is a loss.
Do you have your own CA for the audit? Do you give this service to your clients? Is there any restriction for Govt. employee on trading like intraday or swing? Say I am not a Govt employee now but in future if I get a Govt job do I have to close my Trading/Demat account?
We don’t have any CA’s to do audits. Yes, there could be restrictions on speculative trading (intraday), best to clarify where you are employed. You would not need to close any account even if a govt job, unless asked.
Hi Nithin,
Mine is a case of moving to Kerala from Thane, hence circle and AO would change, should i wait to file returns until this happens ?
Regards,
MSP
No need to wait. You can file and also submit a copy of your request letter to move from Thane to Kerala.
thanks a lot for this information. sir I am salaried person. in financial year 2014-15, I had booked 11000/- profit in intraday (equity) and 10000/- loss in short term (equity delivery). around 800/- in STT, 100/- in stamp duty and approximately 1200/- other expenses like AMC, brokerage etc. so net was nominal loss. I ignored this nominal loss and filed ITR1 and paid TAX before due date. I should file ITR4 but filed ITR1 as the loss was nominal. is there any problem?
now this year (f.Y.2015-16) I have profit of Rs. 12000/- in intraday (equity) and short term capital loss of 115000/-. expenses like STT, journal, stamp duty, brokerage etc are 9000/-. I have invested 75000/- in ELSS (tax saver mutual fund) last year in SIP. I think I should use ITR4. total turnover in intraday is 65000 and in delivery case it is 65 lakh. you have written in an example that loss of 25000/- be treated as profit even though it was loss. in my case what would you suggest?
thanks
The thing about income tax filing, is that it is self policing. It is a problem only if IT department sends you a notice. The chances of getting notice is really high, if you have traded on exchanges and not declared the activity. Very easy for IT department algorithms to spot it. So it is best to declare the profit/loss when trading using ITR4. Since you have a net loss, that means you haven’t evaded any income tax, so it should be okay. But if you get a notice, you will still have to go meet an ITO and explain why you didn’t declare this.
Yep this year, since you have done intraday equity, you have to use ITR4. Short term loss can be shown as short term capital losses. Show intraday trading as speculative business on ITR4.
thank you very much sir.
last year I filed ITR1. Now how to rectify it? is there any way to file ITR4 now for f.Y.2014-15?
Yes Shrawan, you can modify/rectify your the forms you have already filed. You can’t carry forward any losses though.
sir, as I told earlier everything. if I modify then do I need to get my balance sheet audited? So should I show loss for the f.Y. 2014-15 as the loss is not going to be carried forward. and if I show loss then auditing is required.
can I file ITR4S showing only intraday activity ( turnover less than crore and profit more than 8%).
If you don’t intend to carry forward the loss, if you show profits as 8%+ of your turnover, you don’t need any audit. If tax on this 8% of turnover as profit is very small, it makes sense to show profit to avoid audit. If not, yeah, best to get audit done.
You can’t use ITR4S to declare intraday equity trading which is considered as speculative business.
Hello Nithin Sir,
Thanks a lot for this valuable information you provide.
I need you help in selecting the correct ITR form.
I am a salaried person of 20% tax slab.
In FY 15-16 , I had done only Intraday trading and in a a over all loss of 15k.
Could you please let me know which ITR form i should be selecting.
Regards,
BKD
Since you have done intraday equity trading, you will need ITR4 to declare this speculative business loss.
hello nitin sir,
thank you very much for this chanpter regarding taxations.
my question is can’t we sum up all our income and file the it return accordingly, for example
+ income from pension
+income from rent
+income from fd inerest
+income from other business (profit or loss)
+income from stock market (equity intraday / positional / f&0), (profit or loss)
total income is say any number
and pay tax according to the total income, regardless of turnover, audit or different types of itr forms
thank you in advance.
You can use ITR4 (which is meant if you have business) and show all of this in respective heads of income. All the income can’t be shown under the same head on the ITR form.
Thank you very much for your reply…
but what about the turnover and audit?
i don’t want an audit that’s why i want to consider the total income from all the sources and pay taxes as per the slab.
please guide me in this regards…
thank you very much.
Turnover and audit comes into play only with your business income. Pension unfortunately can’t be shown as a business income. All the other bits can be shown together.
THANK YOU VERY MUCH SIR.
Welcome!
I am quoting an excerpt from this chapter:
“For Example – In case of income earned during FY 2013-14, the belated return can be filed up to 31st March, 2016. However, if return is filed after 31st March, 2015, penalty under section 271F can be levied.”
are we sure here that the last date for filing Income is 31st March, 2016? or is it 31st March, 2015?
Ah typo, changing it to 31st March 2016
Dear Sir/Madam,
Recently i filed my ITR-4 form but after filing i realized that i had made a mistake and that mistake was that there is mismatch of Re 1 in Balance Sheet of ITR-4 form, and that mismatch is between Proprietor’s fund and Sources of Funds.
My question might sound silly but because of this mismatch of Re 1 can my ITR form be rejected ?
Shall I revise this ITR-4 form ?
I am very much worried, I need your guidance, awaiting your reply.
Thank you.
Nothing to worry Romeo, you can revise if you wish to. But dont’ think it should matter.
Thank you very much Sir.
Dear Nithin,
Can you help to answer the following:
1. Have salary of 5 lakhs during FY15-16. Also STCG of 2000 and F&O loss of 1.25 lakhs. Reading by the article i guess ITR 4 will be required and audit also required. Kindly confirm the understanding.
2. Can the STCG of 2000 be sett off against the F&O loss?
3. Can you please help with any CA in Mumbai who does this type of audit and help in filling the balance sheet and P&L in the ITR 4.
Thanks
Hemant
1. yep
2. you can set if off if you show the gain as non-spec business gain.
3. hmm.. can’t think of any. You could ask http://www.taxiq.in and tell them that you were referred by Zerodha.
Hi Nithin,
I have downloaded ITR-4 file from the site, and filled the details.
However, while uploading at the site AY 2016-17, is giving error, upload valid xml file.
Please suggest way out for this.
Regards,
MSP
MSP, usually the utility offered by IT department itself has some problems every year when it is put out. Maybe you should try it in one or two days once again.
Hi Nitin,
I am salaried individual and I do pay tax and file return. I have started buying and selling shares recently. If I remember I did purchase shares of a company and sold it in less than 12 months. The profit amount was very small(around 12k). If i need to file this as well, how to do this? Do i need to submit a separate form? If yes then form number? or do i need to include in the same ITR1 which I use to submit my salary income.
Thanks,
Sundaresh Shenoy
If you have capital gains you need to use ITR2 and not ITR1.
Hi Nithin,
Saw your comment regarding avoidance of ITR4S and filing ITR4 instead in cases where turnover is high as ITR4S was meant for small traders and business. However, Sec 44AD clearly says that any eligible business having turnover less than 1 Cr. (2 Cr from next AY) can declare presumptive income (8% of turnover) and pay tax accordingly. Further, eligible business is any business excluding the business of plying, leasing and hiring goods carriages which are covered under Sec 44AE. This shows that trading in equity and commodity derivatives, excluding intra day equity trading, is an eligible business under Sec 44AD.
Also saw your comment regarding ITR4S not being applicable in case of capital gains from shares. But what if one wants to declare the capital gains as business income, which can be done in case of traders, by also including the sale side value of the shares as part of turnover. In my opinion, F&O traders who also treat equity share trading (excluding intra day share traders) as business, are eligible for being treated as a business under Sec 44AD and can file ITR4S, provided the total turnover including share trading turnover is less than 1 Cr. This will avoid the hassles of filling up ITR4, which requires a CA’s help, and also maintenance of regular books of accounts. Going by the language of Sec 44AD, the IT department should not have any problems in such filing. Your comments pls.
Thanks and regards
Suresh, ITR 4S I agree with you on everything. The cases where I have been telling people to use ITR4 instead is where there ITR4S is being used for reducing the tax liability. Assuming you have made 10lks trading profit, at highest slab you have to pay 3lks in taxes. If turnover was say 50lks, a person can declare 8% of this as profit, which is Rs 4lks and pay 1.2lks taxes on this. This will mean by using ITR4S, there was a revenue loss of Rs 1.8 lks to the IT department. In such cases, I think it is best to use ITR4, most ITO’s don’t understand how turnover while trading works, so best to be safe.
Does one have to maintain books of accounts (Bal sheet, P&L etc) in physical form, or soft copies (excel sheets) would suffice
Soft copies should do.
hi Nithin sir , can you guide me !
sir my age is 44 and full time student of film Direction ( bachelor of cinema 2012-15 ) but going to more than one year late pass out because of goverment college admin problems ….and soon going in the world of work , media and entertainment industry! as freelancer or assist someone
sir before that 2012-13 i have done trading and following is the case of me …
I have received the below mentioned notice first time on 14th June 2016 by post.
SUB: NON FILING OF INCOME TAX RETURN-REG.
FINAnCIAL YEAR 2012-2013 ASSESSMENT YEAR 2013-14
Compliance Module on the e-filling portal at income tax India filling
2012-13
STT-01, STT-02, STT-03
sir ,
i have turnover >> 1 crore but statement of capital loss more then rupees 10000 in equity then 25000 loss in commodity in FY 2012-13 and same year i have changed career direction become full time student so left the trading. And i have no taxable income upto FY 2015-16. since last four years i m living on loan by friend and small saving for continue study and living expenses.so
(1.) how i reply this notice kindly help me.when i have lost of Rs 35 to 40000/- and no taxable income.
(2.)Is still after four years this time i can fill return for FY 2012-13 AY 2013-14 and carried forward loss? when i already left trading but not closed demat and broker account.
(3) i need CA or just my self register and fill reply of this notice.kindly guide me !
(4) i m interested to enter in future my studied field as Director or film making assistant and along with if i want to start trading again as part time then what profession i have to declare myself and where i found procedure or code when i m going REGISTER YOURSELF at efiling portal
(5) when is my past like trader or student how i treat or declare myself in consider of above this notice what profession fill in present at REGISTER YOURSELF?
(6) if i will not trade than work of film makers as assistant main thing what profession i describe because who knows future you are not just after college you are going to direct film as chief directoror may be whatever work will come for surive so how profeesion describe when still income is not generate or at present status is student..
kindly give me light !
Thanks
xyz
1. Reply back online (no need of CA) saying no taxable income.
2. You cannot file returns now, you have to do it within 3 years.
3. No need of CA, you can do this yourself.
4. There is no registration required. At the end of the year, you have to use ITR4 forms to file returns. I have explained in this module, do go through all chapters.
5. If you are not trading now and have only fixed deposit income, just use a normal ITR1 form. Most websites like cleartax etc, do this at Rs 100 odd rupees per ITR form.
6. Even if you don’t have an income, it is a good practice to file ITR returns. Go through the chapter on ITRforms to know which form to use .
NITHIN KAMATH !
salute sir ! Great help ! first time i visited this site when i got IT notice looking help and there and you have support me ! my heartful thanks ! Aap ne apna bana liya ! you give me smile , confidence and clarity! sure i will go through module
Hi Sir, thanks a lot for such an article on tax.
1. i have loss on F&O. Can I offset it against the PF withdrawal in the same year. PF withdrawal is taxed separately by the PF department while withdrawing. Thanks.
2. is there plans to have any tie up with any CA specifically for ZERODHA customers with better pricing. Thanks.
@Nithin ,
I’m a new doctor- getting a salary/professional charges about 3,00,000/year.
I’ve lost F&O about 30,000 (absolute, including brokerages, taxes etc) Speculative 300₹ ( one to two times only). My turnover of about 3,00,000.
Can I file ITR (S) as follows?
1. 50% Professional charges :1,50,000
8% trading turnover:₹25000
Net taxable income(Presumptive): 1,75,000(1+2)
Thus, No need for audit and no taxable income.
Kindly answer me.
To clarify,Speculative is 300₹ loss.
Also, in the Same query,
With ITR4( not S)
2. Can I club professional income with business F&O income- this crossing the 8% limit- showing my total business income as above 8%
And avoiding audit?
Thanks.
Yes
Presumptive taxation for professionals like doctors, introduced from FY 16/17. You can’t use it for last financial year.
1. Yes.
Thanks Nithin..
But, Yesterday after long googling, I found this http://tradingqna.com/3720/audit-requirement-losses-income-profession-exceeds-total
Is she right? Or what you said right? Any help?
Income from business and from profession comes under a single head. So you can adjust. What she has written is not correct, will answer again there.
Thanks Nithin…
Hi Nithin,
Thanks so much for your guidance, i have filed form 4 return, thanks for your patience for my irritating queries as a layman.
May God Bless You.
Regards,
MSP
Hi Sir, thanks a lot for such an article on tax.
1. i have loss on F&O. Can I offset it against the PF withdrawal in the same year. PF withdrawal is taxed separately by the PF department while withdrawing. PF accumulated from 2012-sep to 2015-sep. withdrawn on 2016-jan. Thanks.
No, you can’t Rajiv.
Hi Nithin,
I need to pay advance tax, i had used ITR4 for filing the return for AY 2016-2017, kindly let me know, what i need to do for this, there are losses also of AY2016-2017 which needs to offset.
Regards,
MSP
Check this post, have explained how you can file advance tax. You can pay advance tax after setting off losses from before.
Hi Nithin,
Indeed , i am clear now, Thanks so much, just one query, do i need to consider standard deductions which i am going to make this year , while calculating advance tax.
Regards,
MSP
Yes, you can.
have read your blog related to taxation. If it is long term capital gain we don’t have to pay tax. But when we are treating short term capital gain as capital gain other than business income we have to pay flat 15%.
Now can you please provide me with details like what are the things that we have to do for this procedure. How to calculate the taxable amount and what are things required to submit while tax payment.
And how zerodha back office Q is helping us in this procedure. What are the tools that we get through Q.
If I consult with CA, as you explained in your blog they will talk with jargon and all. By reading your blog I think you can explain better than any one else.
Actually in your blog you only highlighted capital gain as business income. Now tell me from the perspective of short-term gain as capital gain
Sajitha, capital gain is straight forward. On the ITR2 or ITR4, show long term capital gain and short term capital gain separately. That’s it. Suggest you to look at the ITR form.
@Nithin , Having looked at the sample form itr4, analysis of pl section,
I see that settlements(positive F&O and negative)- differences are considered. And PL section, Gross receipts are mentioned as sum of N6+N8+N10( Sum of positive settlements FO, Speculative and sale of shares in the previous sheet). My question is
1. If Gross receipts is the turnover, then only the positive settlements/differences and sale of shares are considered by the software right? What happens to declaring the negative settlements and differences as turnover?
2. Is there a separate place in the itr4, where turnover as calculated by the rules are to be mentioned?
3. Balance sheet is balance of the business or profession right? Not personal balance sheet..
So, if draw from business and put it in FD, I don’t need to show it in Trading business- but from other income isn’t it?
Kindly reply ASAP.
Regards.
1. All positive turnover +settlement/differences is shown as gross receipts. All negative turnover etc is shown under gross sales.
2. No separate place. Sum of sales + receipts is the turnover.
3. Balance sheet is one per individual, so you show all your personal and business income on it. If you draw money from business and put it in FD, you still have to show it.
Thanks again Nithin. Really helpful.
Slightly confused again…
Sales and Gross receipts are the same right.. As shown in part A-P&L.
(1) Sales/ Gross receipts of business or profession (Net of returns and refunds and duty or tax, if any)
If you meant to say negative turnover should be included in
(7)Purchases (net of refunds and duty or tax, if any)[That’s how it’s done in the sample ITR provided]
1.Then you meant (1)+(7) is the turnover: Sales/receipts+ purchases?
Just to clarify that I got this right..
2. Positive turnover(I.e., realised positive differences ) . Buy a lot 75 NIFTY fut @8000 and sell at 8100. Turnover By positive settlement would be 100*75=7500.
3. Though negative turnover (Another day – Nifty buy@8100 and sell@8000 )= 7500 is mentioned on debit side, it will be considered in purchases (7)
4. If I got that right, I see in the sample form that equity purchases and sales are also included in purchases(7) and sales(1) respectively. If (1)+(7) is considered as turnover , then turnover would also include purchase of shares.. Isn’t it? Which it shouldn’t.. Am I right?
5. And how to include premium received from sale of options in it?
Would be really grateful, if you would answer me. Thanks.
1. Ah my bad. Yes you are right.
2. yes
3. yes
4. IF you are showing equity delivery as capital gain, you don’t have to bother calculating turnover for all such trades. If you are showing equity delivery as non-speculative business income, you need to show selling side of the equity delivery trade as turnover (sales).
5. Have explained calculating turnover in this chapter. You have to calculate the turnover and mention it in the ITR (document the way you determined the way u calculated for future reference).
Thanks Nithin.. I did read everything in that chapter..
About 4, I will show everything shares as non Speculative business turnover. Kindly help me.. So, If I include sale of shares in (1) Gross receipts and sales and my question is
1. Should purchase of shares be included in (7) purchases? Because if I include it, then as you’ve said turnover =(1)+(7) according to the SOFTWARE. So, it’ll show as double isn’t it?
2. If I can’t show purchase of shares in (7) where should I show it? So that profit is computed straight.
3. Also, if I include sale of options in negative settlement, what should I do to balance the other side- show purchase of options???
Jeyashankar, Turnover requirement is to only determine if you need an audit or not. So don’t try to add turnover details within the ITR4. Use the purchases and Sales to fill the negative and positive amounts. Turnover calculation do separately to see if you need an audit or not.
1. Show purchase of shares and also sales of share in receipts so that profits are computed straight.
3. For all the short options, MTM it to the closing price of the option on 31st march. So show buying value as close of that on 31st. You can carry forward this position at this price to the next financial year.
Hi Nithin,
Thanks for this initiative.
It would be really helpful, if you could update the ITR4 form to reflect the current version. Also, please write few words on Mr.X ITR4 form with his income, capital gains, derivative details and carry fwded loses in figures. It will add more details to the example. Right now, it just shows the figure which i am not able to figure out where it comes from.
Also, how can one mention the STCG loss in ITR2 form? (I am an investor with net STCG loss in the last FY). Thanks in advance.
@Nithin,
Thanks.
Excellent help. Thanks Nitin. I am a Zerodha member (di0xx7).
Kindly let me know a few things for ITR- FY-16-17 (AY 17-18). So that I will keep documents ready for submission according to your advice.
Major income source for FY-16-17 (AY 17-18) is through stock purchase and sales in cash market only. No F/O or derivaties. I am preparing three logs; one for Long term stock transactions sold after a year that have no tax liability, one for Short term stock transactions that I took delivery of and sold after purchase date but before a year’s end and attracting 15% stcg tax, and finally the intra-day trades that will have tax liability as per income tax slab for businesses (around 30%).
Is this the right approach to classify the taxable transactions?
Secondly, how do I claim my office rental, employee( one assistant for market monitoring) cost, TV & Laptop depreciation? Do I need employee logbook, rent receipts document to be submitted for ITR claim?
1. Yep, right approach.
2. You can keep all these receipts of expenses for your record. No need to be submitted while filing ITR. While filing ITR you just have to mention all your expenses.
I need to fill ITR 5 for my daughter’s Private Discretionary Trust. The only income is interest on Fixed Deposits.
I have entered the interest amount (including TDS amount) on OS tab and TDS deducted by bank on TDS tab.
Now, on PARTB – TI – TTI tab, when I click on Calculate tax, it calculates tax on the interest amount, which is less than 50000.
What am I doing wrong? There is no tax payable, as nett income is less than 50000
You need to use ITR7, ITR 5 is for firms.
Nithin, as per I-T website
ITR 5 – This income tax return is meant for firms, LLPs, AOPs (Association of persons) and BOIs (Body of Individuals).
Since I am referring to a Trust (AOP, private discretionary trust), I need to fill this and not ITR 7
Yeah if it is AOP, then ITR 5. Also for AOP there is benefit of tax slabs, calculated at the highest rate for all income.
Hi, I am using ITR-2, here different question from P&L Statement present in Zerodha. can some one help me and mail me to [email protected]
I am a salaried employee within the 30% tax bracket. i have been doing some practice trading in F&O. My total turnover last year was
Equity F&O turnover = Rs 3031 with Profit = Rs 45
Commodities Futures turnover = Rs 3380 with Loss of Rs 700
As this a very small turnover, what do you suggest as this will be eligible for audit if shown as business income or is it necessary to show as business income at all.. please suggest
While filing show profits of 8% of turnover, you will not need audit. So around Rs 400 profit on F&O and commodities. On Rs 800 you will have to pay tax according to the slab you fall in, but you will avoid audit.
Sir, i am Housewife and my husband gave 1 Lakhs to me for trade, i have lost 41000 out that, and i am not a salary person as well as no other income for me. whether i have to fill IT returns or not, since i was a F&O trader, no equity trade or investment. If Return required which form please guide me
Abirami, best to fill ITR. Show the 1lk as a gift (won’t be taxed), you can show the loss and carry forward it as well. Use ITR4
hi
Hi
I have loss of Rs 4 lacs ( JP ruined me) in equities and loss of Rs 4 lacs in F&o. I assume that i need to file itr4 to carryforward the losses. Why is the same not visible in my login section. DO i need to get the returns audited? ( My income from salary is Rs. 12 Lacs.)
In ITR4, I have asset, say, a phone for 9000 … And I fill 9000 as opening WDV , and closing WDV is 8100(10% depreciation) . I have claimed 900 as depreciation. Now I want to disallow 50% of it 450₹ as personal expense.
Schedule BP 12(I) says
Depreciation allowable under section 32(1)(ii) (column 6 of Schedule-DEP). 12(I) :₹900
Column 6 of schedule DEP is 900 only. Where to deduct this disallowable depreciation?
Thanks.
Personal expenditure can be shown in Part A-OI.
Thanks Nithin… Finally filed my itr4 ..
I have one more query:
I remember reading , that SPECULATIVE transaction will not come under Presumptive income.. Can you tell me the exact section disallowing SPECULATIVE transaction under section 44AD?
I have reworded what I had written earlier. What I meant was that there is no provision to show speculative transactions separately.
Thanks Nithin.
Last one, So,Technically, Even if I have capital gains, I can show the rest as Presumptive income and pay 8% on it using ITR4 (not S) and not maintain books of Accounts, balance sheet and profit and loss and getting it audited.
As long as you are showing 8% of turnover as profits, yeah you can use ITR4 and not need an audit. By showing profit you are not evading any taxes, you are probably paying more, so yep all okay.
Hi Nitin
I have a query about ITR form, which one you would recommed for me ITR 4S or ITR4?
I am salaried professional
income from salary: 7lac
had neet relised in intra day equity: Rs-30,000 (turnover 45,0000)
had net realised profit in F&O: Rs-1,30,000 (turnover 3,30,000)
Finally i turned up in losses (means profit is below 8% of turnover <2crore).
So shall i need to fill ITR4 or could i show profit of 8%( even trading in intraday equity) and avoid audit by CA.
please guide i am very confused about it, can i carry forward losses in ITR 4s?
Preferably ITR4, as in ITR4S there is no way to carry forward loss. If you use ITR4S, you will end up showing 8% of turnover as profits, on which you will end up paying 20% taxes (since you are in the 20% slab).
Hi Nithin,
I tried all other websites but I got something tangible only at this page wrt return filling. Great content.
I am also a proud zerodha user. Last fiscal itself I started investing in equities and therefore I decided to file ITR myself.
But following are my few queries , please help me out.
My Salary is around 9lpa and income from short term capital gains is 11 K and intraday gains as 1 K.
700 dividend and 800 bank interest.
Following are my queries.
1) Do i need to maintain accounts as per section 44AA?
2) Do I need an audit under section 44AB?
3) There won’t be any entries in the Balance sheet, right ?
4) As per the sample ITR4 2015-16 uploaded above , In the P&L , 1.A.iii ) Other operating revenues (specify nature and amount)
following entries are made.
POSITIVE SETTLEMENTS
POSITIVE TRADE
SALE OF SHARES
Could you please elaborate a bit on these entries. and which one I need to write in the ITR
5) I purchased a TV of worth 30000 can I include this in P&L? As I watch business news channel and I guess this can be included as a business enabler , Right ? If yes, under what head it will included
Purchases or other expenses in the P&L.
6) Do i need to show interest and dividend in P&L ? as these are not taxable do I need to even show these in the ITR ?
7) In the capital gains schedule ,In 3.1.a.iii , Expenditure wholly and exclusively in connection with transfer , basically mean brokearge incl taxes right ?
8) ,In which schedule do i need to declare dividend and income
In Schedule OS – Income from other sources or Schedule EI – Details of Exempt Income (Income not to be included in total income) ?
Please try to reply asap.
Thanks ,
Sameer
1/2. You have to decide this based on your turnover.
3. If audit then u need everything, otherwise nothing.
4. This is already explained in the chapters. I think it is best to take a CAs help.
5. You can claim depreciation, under office equipment.
6. Best to fill in other sources, so don’t need to put on P&L
7. Yes
8. Dividend exempt under EI and taxable dividend income under OS
Sir,
1. In above comment, correct me if I’m wrong, one cannot claim the entire 30000Rs (TV) as an expense and has to claim (whatever meager amt.) via depreciation?
2. This depreciation method is to be used if you buy a device (Laptop etc.) for trading related activities?
3. Can I claim for a depreciation of the same device every year? Or is it a one time thing?
Sorry sir I get majority of taxation by now (thank you), but cannot wrap my head around depreciation. Odd. ?
Thanks.
1. yes
2. yes
3. yes, you can continue to claim depreciation of the asset every year.
Sir,
For how many years can I claim? For as long as I want to or is there a limit?
Thanks.
Hi
In Sample ITR-4 Excel
In Analysis of PL Reports sheet, Under P&L account
Purchase of Shares 150,000 Sale of Shares 100,000
(Equity Delivery)
While Just below in the same sheet
Short Term Capital Loss
Sale Consideration 100,000
Less: Cost of Purchase 120,000
Why isn’t Cost of purchase matching to Purchase of Shares when both are for equity shares kept for less than 1 year or are these for different equity shares ?
Please help
ITR4 Sample Excel
How is Equity share sell in CG screen line item 3 ia(CG excel sheet ITR 4 Form) which is Full Value of consideration and bi (Cost of acquisition without indexation) different from P&L sheet line item 1-A-iiic (Sale of shares) and Purchase of share value ??…Are these for different equity stocks ? If yes what type of share fall in respective category ??
PLease help
I think you are trying to include both trading P&L and capital gain schedule. If you are an investor, ignore the equity shares bit in P&L. Also it will be very tough to help on filling ITR online. Suggest you to meet a CA.
I have done trading in F&O, intraday as well taken delivery of few equity shares and sold them before an year….My net is negative..and I didnt have any salary income other than interest income..I want to carry forward losses..Correct me if I am wrong….I dnt need to maintain books and no need of audit..I will be treated as investor..F&O and intraday will come in P&L but for Delivered shares I have choice to show in P&L or in Capital gain sheet..But preferably I should show them in P&L as you have mentioned in Markets and taxation chapter (“calculation of turnover for delivery trades is only applicable if you are declaring equity delivery based trades also as a business income. If you are declaring them as capital gains or investments, there is no need to calculate turnover on such transactions. Also, there is no need of an audit if you have only capital gains irrespective of turnover or profitability”)
I really appreciate your help
Thanks in advance
I will treated as trader not investor (typo)
Yep
Sorry, preferable I should show them in Capital gain schedule (Delivered shares, tenure less than a year)
And Lastly, Why in your Smple ITR-4 sheet , deliverable shares are shown in both P&L and and in Capital gain….Shouldn’t it be on only one sheet
It is possible to further divide stocks that you have bought for delivery into investing potfolio and trading portfolio.
Hello Sir,
Greetings!!
I arrived in Europe in Dec-2014, Now I am NRI. I have done few FD in my existing Indian saving bank account without changing Non-Resident status(Done as Resident Indian). That time I didn’t know that I have to do with NRI account. I want file Income Tax Returns FY 2015-2016. I would like to ask you few things.
1). Is there any problem with FD as resident Indian status ?
2). I have done FD for long term more than 2 year. Should I count interest as per financial year or on maturity ?
3). While filing IT returns should I file as resident or Non-resident ? If Non-resident then how much income tax I should pay ?
4). I have got only income from FD. I do not have any other income in India. Which ITR I should file ?
Regards,
HARESH
1. No problem. Btw FD with NRE status is tax exempt.
2. Per financial year
3. You should based on your current status. As non-residents, the taxes are the same.
4. Just ITR1
Btw, we are answering queries here only in the context of trading and markets. Don’t want to digress from that.
Best,
Sir, I am a salary person with annual income of 5.5 lacs for 2015-16. In 2015-16 my statement is below. I trade only in f&o and lossses are ₹-15,22,452.50 with Total Turnover₹78,64,343.75. Please suggest do i need to get audit done or if yes. What if i dont show this loss in my ITR.
F&O
Futures Gross Profit₹3,000.00
Options Gross Profit₹-15,22,452.50
Total Gross Profit₹-15,19,452.50
Futures Turnover₹3,000.00
Options Turnover₹78,61,343.75
Total Turnover₹78,64,343.75
Total Charges₹59,912.40
Yes, you will need an audit. You can take the benefit of showing the loss and this can be carried forward for 8 years. YOu can set it off against future business profits. So best to declare and file the ITR within time. If you don’t show the loss, there is a chance of tomorrow the IT department sending a notice asking why u haven’t declared trading income. You will have to then go and explain that it was a loss and hence.
Wow, hats off to you Nithin sir. Really very useful module on taxation and you have explained it like a spoon feeding and with simple examples. This is the best module i have come across so far to understand the taxation on stock market investments (both LTCG and STCG) and trading income as Business. Really excellent contribution sir, proud to be a Zerodha client.
xlsSample ITR4 Form (2015-16) Dear NITHIN , this itr-4 sample is coorupt and I cant open can you upload one ITR-4 sample which give details of how to make enteries of transaction in future and options
my client id iis RN-3941
THANKS
Seems to be working fine, will get someone have this checked.
Dear Nithin,
I have a query regarding filing of ITR-4S. I trade futures and shares both. i read somewhere that CBDT considers income from share and futures trading as business income. And ITR-4S allows to file ITR from business income as well as salary both. Filing ITR-4S is very easy and it saves from audit also if net profit is greater than 8% of T.O.
My question is, will filing ITR-4S in above case attract any notice from IT department? Or is it perfectly OK to file ITR-4S in above case.
Thanks in anticipation !!
Regards,
Marzi
Dear Nithin,
I have a query regarding filing of ITR-4S. I trade futures and shares both. i read somewhere that CBDT considers income from share and futures trading as business income. And ITR-4S allows to file ITR from business income as well as salary both. Filing ITR-4S is very easy and it saves from audit also if net profit is greater than 8% of T.O.
My question is, will filing ITR-4S in above case attract any notice from IT department?
Thanks in anticipation !!
Regards,
Marzi
As long as you are showing equity trading as a business income and profit over 8% of turnover, no issues.
@Nithin
sir, i am a student.. doing trading from last 1 year 6 months.. i want to file ITR.. can it is possible to file ITR now with late fee?
In August.. i am little confused that i will fill ITR or Not… but now i think it is better to file ITR..
can any options left for me now..?
plzz guide..?
Shivam, there is nothing like a late fee. If you have any income tax to pay,you have to just pay the interest for the time period you haven’t paid. You can file late returns, no issues.
Hi Nithin Sir,
I have intraday profit of 1.3 lac on a turnover of 4.6 lac (I calculated turnover my adding absolute values of buying/selling). I also have equity (delivery) based profit of 1.2 lac on turnover of 90 lac (which is my sale value of equity deliveries). There is no F&O etc.
I need to file ITR4.
1. Is my total turnover sum of of 4.6 lac and 90 lac i.e. 94.6 lac for trading?
2. If answer to above is yes, then it means my total profit is 2.5 lac (sum of 1.3 lac from intraday and 1.2 lac from delivery equity) and in this case profit of 2.5 lac is less than 8% of 94.6 lac. Is audit required then?
3. If answer to question 1 is NO, then will I need to show my turnover only for intraday i.e. 4.6 lac and profit 1.3 lac and in this case, my profit will become more than 8% and accordingly I will not need the audit, right?
4. If answer to question 3 is yes, then the equity delivery profit of 1.2 lac will be simply a short-term gain requiring tax of 20% only. Is this the right understanding.
Your answers to above four will help me a lot in deciding how do I fill ITR4 and whether I will be requiring audit.
Pls help and guide.
Thanks again,
Anil
1. If you are showing equity delivery as capital gains, there is no concept of turnover. If you are showing as business income, yeah 94.6lks.
2/3. If you are showing as business income, yeah audit required. If you show only intraday as business, no audit.
3. yes
4. Yep, 15% is STCG and not 20%.
Cheers,
Thank you so much Sir.
1) I forgot to mention in my above queries that I’ve regular salary income also from my job which is my main source of income. I fall in >30% tax-slab just based on my job-salary. Does my regular salary from my job affect the turnover calculations and audit requirements for my above scenarios of equity trading? And if salary is indeed used in turnover calculations and audit requirements, can you pls give a small example?
2) Also, my trading frequency is quite high so someone told me that if trading frequency is high then show both intraday and equity delivery as business income and do the audit but show the long-term equity gains alone as capital gains (no tax) in ITR4. Hope that’s fine.
Above two are the last two queries I have. Thanks very much for your guidance,
Anil
1. Salary doesn’t make part of any turnover calculation(only business profits and losses for turnover).
2. yep, you could do that. But the idea is to follow the same principle in the following years as well.
Hi Nithin sir,
Forgot to mention in my above queries that I’ve regular salary income also from my job which is my main source of income. I fall in >30% tax-slab just based on my job-salary. Does my regular salary from my job affect the turnover calculations and audit requirements for my above scenarios of equity trading? And if salary is indeed used in turnover calculations and audit requirements, can you pls give a small example?
Thanks again,
Anil
Hello Nithin Sir,
Can you tell me some good books from which i can get good knowledge about ‘ TREND ANALYSIS’ ?
sir i have have a business income and agricultural income more than 5000 …which ITR should i file?
ITR4
Thanx sir…
Hi Nithin Sir,
In my audit report (3CB and 3CD) sent from the chartered accountant, there is no mention of turnover amount, profits amount etc from intraday and equity-delivery transactions. Does 3CB and 3CD audit report not contain any of these figures? He has also provided an additional excel sheet which has subsheets of P&L, Balance Sheet. When the CA would upload his 3CB and 3CD audit reports, is he also required to upload this excel sheet (of P&L and balance sheet) which has the actual details? I shall ask him to upload accordingly.
Thanks again,
Anil
The Report is Consolidated one, 3 CD does have point on Gross Turnover + Gross Profit and Net profit as well many other related to various tax benefits, compliance, and deduction claimed by assessee and if verified. With 3 CD upload, Auditor need t upload Balance Sheet & Profit & Loss also .. in PDF ..
http://www.incometaxindia.gov.in/forms/income-tax%20rules/103120000000007767.pdf page 11 has specific question on turnover
Hi Nitin sir,
I have loss in Intraday is Rs 20,000 @ total value 35000 and profit in Delivery base equity is Rs 25000 @ total value 3,90,000. Then how do calculate Income tax and Turnover ?? Is ITR2 form is acceptable??? is audit required for this??? please explain……….I am confused
For equity delivery based trades, you show this as capital gains, there is no turnover and all calculated in this case. To declare your intraday loss, you will have to declare turnover and use ITR4. If you didn’t have intraday, you could have used ITR2. Check out the chapter on turnover.
Dear Nitin,
I trade from my partnership account in zerodha. Does the same Tax slab is applicable for my firm income.
Yes
Nitin Ji,
I have only only one source of income that is Share Trading (both Intraday and delivery) In this case how should i fill my ITR using data from Q and which form should I select ?
PLz Help me
Thank You
You need to use ITR4. Yes you will get all details on Q. Do go through this entire module.
Dear Sir, I am a senior citizen with wife and 25 lakhs of NRI white money and no specific commitment. How should I invest so that i should get sufficient fund on a monthly basis so that I can lead a comfortable life after Tax deduction for its capital gains
Mr Joshi, I don’t know if stock markets are advisable if you are trying to get a guaranteed income. If this 25% is extremely important to you, maybe allocate 20% to a diversified equity mutual fund and the rest in a fixed income product (FD/liquid funds etc)
If somebody does not want to deduct expenses for his trading income can he treat his income/loss as capital gain/loss irrespective of the type of trading he does and the volume that he generates over a period of one year.
I have e-filed a revised ITR and added fake amount in section VI A deductions -80C, I will get a refund of around 9000, will I be caught?
If yes then what will be the penalty?
hmm… you can be caught. Penalty can be upto 300% of the tax that you have avoided paying.
what is the probability of being caught, given that there are crores of people paying tax and i am avoiding only around 8000 to 10000 rs tax; how will the IT dept narrow down to me ? do they have a system ??
Luck of draw. Chances are higher if you have done cash transactions etc, which would make the IT departments to look at your ITR forms in detail.
Thank you for the information 🙂
Suppose me and my partner run a eCommerce business together and earned a revenue of say Rs 10 Lakh. Barring all expenses the true profit is say 8 Lakhs. I have been the front face for the business and I paid my partner half of the profits as salary for her work contribution. 50% of the expenses are in cash and thus making it harder to maintain book of accounts. Does it make sense for me to file ITR-4S should my profit as 4 lakhs out of 10 lakhs revenue (i.e. 40% profits). What form should my partner use to file her taxes ? She has earned salary from me but of course does not hold Form-16.
What should I declare as “nature of business”
Hi Nithin,
have speculative and non speculative business income, can I file ITR4S to show only 8% of entire turnover as my income and pay tax on that.
This is because my income from this source will exceed 8% even after deducting all expenses if I go for ITR4.
Thanks for your help,
Vishal
Hello Nithin,
What charges should be paid by a trader (just an idea) if CA audit full time traders, also if audit is not required ?
I also heard Zerodha provides help to fix your taxation but couldn’t find. I need CA.
Thanks,
Rajib Saxena
Audit can start around 7k and go upwards upto 25k to 30k. We were helping before, found it tough to support. You can try reaching taxiq.in
Hi Nithin,
Newbie here. Thanks for these valuable lessons. Just started investing journey through Zerodha and have 2 queries:
1) Up to now I am a investor only. (Equity Mutual Funds and Equity delivery shares) I have only bought both of these instruments and have done no selling this year. So because my only income this year is by salary and no capital gain from selling, should I be filling ITR 1 as usual or ITR 2?
2)I am planning to by international ETFs (Motilal Oswal Nasdaq 100). Now these ETFs are listed on NSE but have international stocks, so how capital gains(long and short) from ETFs like these will be taxed? And will ITR 2 cover capital gains of international funds too?
1. You could use ITR1 as there is no capital gain to declare.
2. Taxation works like normal equity mutual funds/stocks. Yes ITR2 is enough.
Assume I’ve made loss in trading n if I don’t file income tax return ,will there be any penalty on me? Thank u.
There won’t be a penalty since you haven’t evaded paying tax. But you might unnecessarily get a notice asking for an explanation on why you have traded and not declared on your ITR.
Hi, Can you please help me with this. My income (which is essentially a fixed monthly salary) is paid as “Professional fees” and it comes under no audit case, but book of accounts is to be maintained. I am not claiming any expenses and showing all the fees received as profit. I am not investing any money in my profession. and its online job. Can you please tell me
what should I fill in the Balance sheet of ITr4? Till now I have been leaving it blank and there werent any problems. But this year they have sent a notice. In the balance sheet, a) what do I fill in Proprietor’s capital, sources of funds and current assets? b) Should the capital be the whole fees I have received or is it the total money I have in all my bank accounts? c) I believe it should have nothing to do with the amount of money I have and shd deal with only the fees I receive for my job?
Please advice.
Thanks for your time and help
Anup, we are keeping the posts and Q&A specific to people who invest/trade stock markets only.
Ok. Thanks. But in case you could offer some advice it would be much appreciated.
Hi,
I was just trying out some Currency Trading and made about ₹1000 and won’t be trading anymore.
Should I really need to show this using ITR-4 (includes preparing P&L and BS)
Or can this amount be included somehow in the ITR-2 as Other Incomes or as a Capital Gain?
Thanks for any inputs..
Hmm… technically you can’t show as capital gain, but a lot of people do. Best to speak to a CA. You can also use ITR4S, and show this as presumptive gain, so no need for P&L or BS.
Hi Nithin,
What does presumptive gain mean? ( you used ” presumptive gain” word in your above comment.
Read Section 7.3 Above.
Thanks Maruthi. I have read all chapters of varsity 1 and more times. but some terms keep forgetting. Now I will remember “presumptive gain” life long.
Thanks for your reply. I guess I’ll check up with a CA.
I’m in an odd position where the only Taxable income I make is from Capital Gains and the bit from Currency Trading.
So I can’t use ITR-4S and shouldn’t be using ITR-2 which leaves me with only ITR-4.
Thanks again.
Hiiiii sir recently our family shifted so every identity proof ive it has old address so how can I open zerodha a/c? Pls help me
Yes you can Vivek, we anyways don’t send anything physical. You can use the old address and open account, and then change.
Thank u nithin sir☺
HELLO SIR GREETINGS
I was abroad for last three years and now i come back to india before going to abroad i used to trade intraday and delivery also, my problem is
1, while during the stay in abroad i had traded in both intraday and delivery without changing the status to NRE in my normal trading account. will it create any problem while filing IT return as
2, as now i come back i had a normal Nre saving account and bank told me to change to normal resident saving account after achnging whether the principal amount is taxable or not
Thanking you for your earlier advices thank you
joe
Shouldn’t be a big deal as long as you don’t evade taxes. Make sure to show your trading income on your ITR, do consult a CA for this.
Assume When I do not have any other income and do only trading in Equity, F&O and Commodity. The turnover is less than 20 lakhs and have profit of 2 lakhs. (consider no other income). Should I File ITR ? If So, Is ITR 4 without Audit acceptable ?
Thanks,
Venki
Yes, best to file ITR (it is not mandatory as your income is below min tax slab) as there is a small chance of an automated IT notice if you don’t declare. If you receive notice, unnecessary inconvenience of having to meet the ITO and all. Yes, ITR4 and no need of audit.
Hi..
This is my first year into trading. I have certain queries.
1) My intraday turnover is 23443 & it is completely loss
2) Short term loss is -5646
3) I have a salary income.
A. Whether i can use ITR 4 & show profit more than 8% without giving audit details? is it possible ?
(or)
B Is it possible to use ITR – 4S & show only 8% profit in intraday & pay tax according to tax slab and not to declare short term loss.
C. Any other option available ?
A is a better option.
Thanks Mr. Nithin.
In your taxation module, it is updated now as below
ITR 4S (Sugam) – this is similar to ITR4 but with presumptive scheme if section 44AD and 44AE used for computation of business income. ITR 4S can’t be used to declare any capital gains of if losses has to be carried forward. So you can use ITR 4S only if you have business income (speculative + non speculative), but it is best avoided if by use of this form you are reducing your tax liability.
A. So is it possible to use this form for speculative business income(intraday trading) ????
and
B. I have net loss through intraday so i have to use ITR3 as per requirement. But by showing 8% or 6% profit, we can submit the form without audit details & that will not create a problem ?
a. Yeah, for all business income
b. No problems.
Dears, Thanks for priceless advice… appreciate. 3 queries pls.
1) Was an NRI.. Returned and off work now. Always did delivery based trading in FY 16-17, but once mistakenly forgot ‘cnc’ option and lost rs. 17k in intraday…. so do i have to report as ‘Trader’ in income tax return, instead of investor, for this single mistake ?
2) If I file as ‘trader’ do i have to pay 30% tax on STCG & LTCG gains too?
3) If i book STCG loss of 32 lakhs for tax harvesting , will it be offset against LTCG gains of 8 lakhs booked in this FY 16-17?… or LTCG gains are not used for offsetting, either for trader or investor?
Hmm.. I’d suggest you to speak to CA
1. If it is one trade, I’d say show it is short term capital loss
2. As a trader, you can have both trading and investing portfolio. On the trading portfolio it will be 30% (based on tax slab). Do read through all the chapters of this module.
3. LTCG is anyways exempt from taxes. Booking the short term loss, wouldn’t really be tax loss harvesting unless you have other short term capital gains to set this off against.
Thanks for detailed reply…. concerning 3rd query, I had 10 lakhs STCG profit in fy 16-17. So will the LTCG gains also be offset after offsetting STCG gains? I had read to that effect in these modules, and so I am worried.
Further, will booking these huge STCG losses in FY 17-18 offset LTCG gains earned in FY 16-17 or only FY 17-18 LTCG gains will be considered in tax harvesting?
My primary concern is to carry forward the STCG losses for 8 future years, knowing that LTCG gains are either offset or not.
You can carry forward the short term losses for 8 years without offsetting it with LTCG gains.
hmm.. confused what you are trying to ask. On long term capital gains there is no taxes to pay. I haven’t mentioned this anywhere in this module.
Sir, the confusion is due to following para on url : http://zerodha.com/z-connect/traders-zone/taxation-for-traders/taxation-simplified …..
b. In case of losses
Investor
Any short term loss arising from the sale of shares can be net off against any short term capital gain or long term capital gain in the future (upto 8 years) provided you have declared the loss while filing the income tax.
……
Also, following para on url: http://zerodha.com/z-connect/traders-zone/taxation-for-traders/tax-loss-harvesting ….
As a trader, your can set off any other business profits (any other income of yours excluding salary income) against this loss as well.
Ah, it says “Can be” and not “will be”. The reason can be is because currently long term capital gain is exempt from taxes, if they introduce tomorrow, then you can setoff. Can means it is optional to you and not mandatory. No one would setoff short term losses with long term gain (when long term gain is tax free).
Suggest you to go through all the chapters once.
Thanks a lot for the clarification … i can do the tax loss harvesting, at ease now.
Sir, I am a house wife and I have shares gifted by my son and made short term delivery based gains. I have no other income for the period. My gains are below exemption limit of 2.5 lakhs. Do I need to file ITR and pay any tax?
Not mandatory, but best you do.
Hi Nithin,
My source of income is “agriculture”. Often I indulge in trading in commodity intraday..with losses… lol… If I want to file ITR which form I should use? or better not filing ITR ?
You should file your income tax, ITR4.
hi nithin,
for the finacial year 2015-2016 i had short term capital gain of 21000.
i have no other in come sources.
i calculated 15% tax on STCG and paid the amount.
for e-filing what form i should use…???
i have tried with ITR2 but i can not fill the columns given for STCG (giving some error message like “column is protected/can not modified”)
what i can i do now???
If you have no other income source, you don’t have to pay any STCG. All taxes is applicable only if you exceed minimum tax slab (even STCG). But it is good to file ITR with 0 tax, maybe speak to a CA to figure how to fill the form.
Is it possible for Zerodha to file ITR for willing clients?
No
dear nithin ,
why balance sheet part is left empty in downloadable excel (sample ITR4 Form (2015-16) ) in above example, but in (Sample ITR4 Form (2014-15) Balance sheet part its filled ?
can you convert downladable ITR4 examples into words & sentences so that for first timers, newbie traders can easily understand it more easily when analysing above ITR examples ?
Arvind, we will soon have a webinar on filling ITR4 on April 5th on our youtube channel. Check this.
thanks so much Nithin . eagerly waiting for webinar. interactive demo by filling up a dummy ITR4 would be great. balance sheet , P & L parts of ITR4 are bit complicated for new F & O traders & need lot of handholding . This is where many are making mistakes & getting notices as seen in comments . would love to post lot of queries In that session 🙂
CBDT notifies new ITR forms for AY 2017-18; ITR-4(previously ITR-4S) for presumptive income have some changes…now there are 2 columns to fill in gross turnover or receipts…1)Through a/c payee cheque or a/c payee bank draft or bank electronic clearing system received before specified date…2)Any other mode…..Presumptive income under section 44AD would be 6% for the 1st category as announced by our finance minister on the budget day and 8% for the 2nd category…… so now being a options trader…in which column i have to fill my turnover…presumptive income now 6% or 8% of turnover for stock market traders?????
You can use ITR4S only if you have only F&O trading (equity trades – captial gain or speculative intraday equity) can’t be shown. But yes, it is 6% from AY 2017/18. I will update the post above.
Hello NITHIN SIR….Thanxx for ur reply….I have one more issue regarding PI software….No doubt PI is one of the best online trading platform but it lacks one basic feature….there is not any single way(neither any screener or scripted alert) to get to know IMMEDIATELY about those stocks which are making fresh intraday DAY’S HIGH OR LOW…in NEST SOFTWARE there is some COLOUR change in BACKGROUND of scrips which are making FRESH intraday high or low and this feature will HIGHLIGHT those scrips in MARKETWATCH and helps to catch the move of the stocks quickly………I already raised this issue in front of ur software developer TRADELAB and on our BLOG of latest update PI…..SIR, I can understand that i m just a regular client of yours to ask u to make changes to the software and also PI is a VENDOR’S PRODUCT and it’ll be difficult to accumulate all of these endless requests….chances of getting my problem resolved in the NEXT UPDATE seems to be low….but as u say ZERODHA means NO BARRIER….so kindly pay attention to my problem and remove this barrier of my trading….
Yep, we will do something.
My salary income is 5lks…commodity trading turnover is 97000/-. And P/L = -18000/- (in loss) . So i come under section 44AD. Should i get book audited? Is it compulsory to get audited? Which ITR should i use while filing? Can i use ITR4s for stay away from audit?
Replied just now on zconnect. Since you have only F&O trading, you can use ITR4S. If you use ITR4S, you will have to declare profit of 6% (reduced from 8%) on turnover. So around Rs 6000 profit, instead of Rs18000 loss. pay tax on this Rs 6000, which will be at 20% only Rs 1200. But if you want to carry forward the loss, yes ITR4 and audit would be needed.
Check out given link for any information related to new itr forms and e filing
https://blog.tax2win.in/new-itr-forms/
I am a salaried person and have traded very few intraday (1 or 2 ) and some short term trades. I have a profit of 2000 over all and have not traded in F&O.
1. I believe I have to file ITR 2 . If true, I went to income tax website and only found options for ITR1 and ITR4 under ” prepare and submit form” option.
2. Is ITR2 submission process different than ITR1 and ITR4?
3. How to calculate my tax – 20% of 2k ?
1. yes ITR2. If it isn’t available, give it some more days.
2. Similar
3. 15% of 2k.
dear nithin
in audit information : (“Are you liable to maintain accounts as per section 44AA ?”)
should i tick “no”, but go ahead and fill balance sheet , profit loss in full . ( instead of filling no accounts case areas )
being a newbie, traded very less as i was in training mode & getting a feel . only 4-5 trades.
my total income for year was less than 2. 5 lakhs & made a net loss of 2000. ( loss in intraday , profits in f & o , currency futures, STCG etc )
is it 100% confirmed that i don’t need an audit ?
if they send a notice ,should i quote section 44AA & 44ad to support my claim of why not getting audited ( as i made a net loss of 2000 but i’m below 2.5 lakh bracket & turnover below 1 crore ) .
most CAs & income tax helpline people are confused lot themselves 🙂 .
in cleartax platform when i tested a dummy ITR it was giving error stating i need an audit .
If your turnover is less than 1 crore and no tax to be paid, ideally no audit is required. yes, tick no and fill balance sheet. Indian IT, nothing is 100% confirmed. :). I know a lot of traders who follow this method, and haven’t ever had issue even if they are pulled up for scrutiny.
thanks much ! hopefully i’m equipped enough to pacify them with my answers 🙂 :d
Dear Nitin,
Its good to read through such a big Taxation knowledge base that you have created on Varsity.
I am an NRI for past 15 years and since I did not have any income in India never filed returns. Last year first time as a NRI I filed returns for AY 2016-17 & AY 2015-16 but after the due date of 31st July 2016 to claim refund of some NRO interest TDS.
I had taken help from a CA for same. I was looking at the ITR2 for AY 2017-2018 this year and saw a column asking for all bank details. do I need to mention all NRE/NRO accounts as well as PIS account that I use for equity investments? I just checked my last 2 returns and my CA had filled only my NRO accounts and did not fill the NRE accounts which I had given him. when I checked with him after seeing it now, he said no need for mentioning NRE account as its income is Tax excempt for NRIs and only mention the NRO accounts as the TDS deducted needs to be claimed from them..
1. Just wanted to confirm is that the case?
2. If not will this create any issues for the previous ITRs. what is the solution in case I need to add the NRE accounts as I have already received the refunds also for both returns which I had filed after the due date.?
3. I am planning to mention both NRE/NRO in the latest ITR for AY 2017-18. will that be good enough?
4. this FY my NRE FDS have matured after 4 years. do I need to show them in the returns if they are tax exempt?
5. I am filing ITR2 where there is the asset & liability declaration if income is above 50 lakhs. this 50 lakhs is taxable income in India or also includes exempt income like India equities LTCG and dividends, NRE FD interests and my salary income outside india? also the assets purchased in India have to be declared or all the assets in India or abroad?
6. I have been investing in equitiesmostly for LTCG for past 4-5 years and my total portfolio value this year is now more than 1 crore. do in need a audit being a NRI trading/investing through NRI PIS?
will appreciate if you can answer my above queries.
Thanks for your advice.
Hi Nitin can you please advice on the above queries. Thanks
1/2. No issues as income is exempt. But it is always best practice to declare exempt as well.
3. Yes
4. Yes, there is a worksheet to declare exempt income.
5. Only if taxable income in India exceeds 50lks (not including ur foreign or exempt income). Balance sheet of assets in India (optional to fill foreign assets if you are a non resident).
6. No audit if only capital gains. Audit is required only when there is business income.
I want to use ITR 4S. I do only intraday nifty future trading and having some other personal business. If I make any long term capital gain from share which is absolutely tax free, could I use ITR 4S? Waiting for your reply.
Even thought LTCG is exempt, it has to be declared on the ITR. ITR4S cant be used for capital gains, you will need to use ITR3 (earlier it was called ITR4)
LTGC arises if I sell them. But if I keep them for long term investment, then can I use ITR 4S (now ITR4)?
Yes
Q. Through a/c payee cheque or a/c payee bank draft or bank electronic clearing system received before specified date – what is the meaning of received before specified date in ITR-4 for A.Y. 2017-18 ?
The Specified date here is date of filing of the return on due date as per Sec 139 which is 31st July for Non Audit cases and 30th Sep in case of Audit cases.
Thanks Nithin for the comprehensive information regarding the tax treatment of the income generated in stock market trading. I’d be grateful if you could help me with below query:
For FY 2016-2017, a professional with professional income INR 2000000 out of which the profit is 1200000 and the loss in F&O is 1 lakh with turnover 500000. As I understand from the readings here, ITR 4s can be used for filing the return with presumptive income of 10 lakhs or more for income from profession. Can the loss in F&O be set-off against profit in professional income? Also, do you think in this case audit will be required and if so, for which income (loss) – the loss in F&O trading only or both F&O trading and professional income?
The Tax calculation is on all types of profession in total. In case of Professionals you can choose the presumptive taxation if you choose to declare 50% of profit for Income under sec 44 ADA. Once you club both the turnover , it automatically offsets. Here the important thing is if its carry forward loss then it can offset only against F & O .
44ADA. (1) Notwithstanding anything contained in sections 28 to 43C, in the case of an assessee, being a resident in India, who is engaged in a profession referred to in sub-section (1) of section 44AA and whose total gross receipts do not exceed fifty lakh rupees in a previous year, a sum equal to fifty per cent of the total gross receipts of the assessee in the previous year on account of such profession or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the assessee, shall be deemed to be the profits and gains of such profession chargeable to tax under the head “Profits and gains of business or profession”.
(2) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed.
(3) The written down value of any asset used for the purposes of profession shall be deemed to have been calculated as if the assessee had claimed and had been actually allowed the deduction in respect of the depreciation for each of the relevant assessment years.
(4) Notwithstanding anything contained in the foregoing provisions of this section, an assessee who claims that his profits and gains from the profession are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (1) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.]
If I consider my frequent equity delivery trade as business in come than whether price of script would be turnover or total of positive and negative value ie total of all loss making scrip and profit making scrip
Turnover for delivery trades as a business will be value of all sales. Check out the turnover chapter. So if you bought stocks for 1lk and sold for 1.2lks. 1.2lks is the turnover.
Sir i am clerk in psu bank. Total salry near 2.5 lak . Last year I have done trading heavily. Some in fno and delivery basis for intraday to month holding. My total turn over crossed over 6laks. And i have invested 3 lak. I am at par now no loss no profit.I haven’t inform my employer. Can i do continue and What form i have to fill to return incom tax. Please help
Best to find out from the bank if you can trade in your name. You can use ITR4 for filing this.
I DO NOT HAVE ANY SALARY INCOME. I ONLY DO SHARE TRADING (EQUITIES / F & O). FY 1617 MY TOTAL T/OVER WAS APPX 20 L WITH LOSS OF
12 L AND PROFIT OF 8 L.I HAVE SOME FD INTEREST INCOME AND DIVIDEND INCOME.
I ALSO SOLD MY LAND WHICH WAS BOUGHT AROUND 7-8 YEARS BACK, SO THERE IS SOME LTCG ALSO. CAN YOU
PLS ADV WHICH ITR I SHOULD I USE. IF ANY AUDIT IS REQUIRED FOR THE SAME OR I CAN DO AWAY WITHOUT AUDIT.
I am housewife and dont have any income. I mostly trade in intraday or short term.
My turnover is below 1 Cr. Which ITR form to be submitted ITR 2 or ITR 4
Whether audit is necessary if I file return through ITR2.
ITR4
Hi Nithin,
My short term/ intraday turnover is 186000 Fn o turnover is 11000000 and total net profit is around 770000.
So can I use itr4s to reduce my tax liability by showing income as 6% of turnover ?
By using itr4s I can avoid auditing as well
Yes, you can. Btw, this is renamed to only ITR4 from this year. ITR4 is called ITR3 now.
i have some income from coaching class and i do trading and have some income from intraday and some income from delivery trades which itr form i need to fill .Total income is less than 2.5 lakh is i require to pay any tax.
ITR3, no tax if total income less than 2.5lks.
i. Does I require to maintain book of account and audit this time.
ii. In later time if my income goes above 2.5 lk then is required.
Best to get audit done, if you are doing F&O.
Hello Sir I had done trading on both intraday and delivery based and my overall loss is 40k but my turnover is about 2 Crore .Should i need any audit by CA or not for income tax return filing.
Yes, best to do it. But do check out the chapter on turnover.
Can I get my money back?wat I paid for taxes these trading days!.we are paying a lot for taxes rather than a getting profit amount.suggest me a way to get taxes back,if der is any choice or options….tell me if any other options to get money back which are paid for security, brokerage,stamp duty, exchanges… Please suggest me,I don’t know anything about this!I’m a student in NITK SURATHKAL
Hmm.. all the transaction taxes, there is no way to get it back. Cost of doing this business. Income tax is paid only on profits, if you have losses you can carry forward and setoff against future gains.
My Salary plus Other income – 15lacs
My F&O turnover – 53 lacs
My F&O loss – 2lacs
Do I need to get my tax profile audited?
Yes, Jaideep, needed.
I am getting salary above 5 Lakhs & Earning some money in option also.
For my salary, i have given tax declaration in my company, then how can i pay tax for option trading .
Whether i have to pay tax in another ITR
Thanks
You have to file a separate ITR3 form. Show your salary and options trading income on that.
Hi Nithin,
I have to file Form 3 this time, can i fetch information from last times filing and wherever changes are there update the same.
If yes, how to fetch information from last years filing or i need to fill all the information afresh.
Regards,
MSP
You will have to enter the information afresh. There is a pre-fill option, but that fetches just name, PAN etc.
what is mean by tax profile audited
sir please i am new in trading my first tax willl pay in next year
Go through the module and all chapters Harshal, explained in detail.
sir i have read chapter but if you don’t mine sir can have send the link of all chapter like
1) understanding share market Basic
2)understanding the all query related tax
3)future & option market
4)commodity market
5)equity Market
6)taxes related example and filling tax
7)and all things link can please send in detail step by step
thanks
Hi,
For the last three years I filled up ITR 1 form online as I had only income from my salary. From the last FY I started trading, mostly delivery based trading. In the last FY (16-17) I had a net loss. I went through this module and I would like to show this net loss under capital gain/loss. As per the modules I should fill up ITR 2 but when I login to e-filing website of incometax I could only find ITR 1 and ITR 4 in the drop down of online e-filing. I found ITR 4 very complex to furnish.
Could you please let me know what should I do in this context?
Thanks,
Ujjwal
Hi Ujjwal
As far as I know, ITR-2 need to be filled as separate form ( either java utility or excel one ) available in incometax site
Thank you SHIVDEWANGAN,
Now I figure it out. Please let me know one thing, if I fill up and upload ITR 2 then should I also fill ITR 1.
Thnaks,
Ujjwal
Not required, only one ITR form per person.
ITR 1 and 4 can be auto filled. ITR2, you need to first download and then upload. Check this link.
Sir
I want to fill ITR
How and which ITR I can fill
I am salaried person and doing trading intraday and normal delivery of equity shares from last 8 years.
How to show my losses from trading in ITR.
THANKS
ITR3, do go through the entire module.
Intra-day / Speculative profit -41113.20
Intra-day / Speculative turnover 55298.90
Short-term profit 0.00
Short-term turnover 0.00
Long-term profit 0.00
Long-term turnover 0.00
Total charges
Brokerage 4301.67
Turnover charges 1586.32
STT 6102.00
Service tax 824.37
Stamp duty 1074.99
SEBI charges 97.70
Total charges 14045.76
Hi please see the above details. Apart from this I have an interest income of about 50000. I am a homemaker. Which form do i need to fill for my returns. Do i need an audit
ITR3, since total income below 2.5lks, no need of audit.
Hello,
I had a loss while trading in FnO, and my turnover is less than 1 cr. I want to ask if i didn’t show it, will there be any legal problem.?
If i still show 6% profit as you mentioned above(even i am in loss) to avoid audit, so the loss acquired in previous year can still be used now?
Can i show this loss if i am profitable in this year FY17-18 even if i didn’t show in FY16-17
THe only problem could be that you might get a notice asking why you haven’t declared trading income. Unnecessary hassle. If you file your returns on time, you can carry forward the loss and set it off against this year profit. But for that, you need to declare the loss (not a % as profit)
No problem as such, if you get a scrutiny, you will have to go explain saying you didn’t declare since you had a loss. If you show 8% profit, you will have to pay taxes on it. Since it is not a loss anymore, you can’t carry forward.
Sir
I am resigned for my job one and half year back, since then I am doing trading in stock markets. My income from day trading is 43500 and short term gain is 217900 and long term gain is 71400. I do not have any other income except dividends from companies. Last year I filed ITR 1
as I have salary. What is my tax and what ITR form has to be filled ?
ITR 2 needs to be filed. If your total income is not above 2.5lks, no tax to be paid.
HI,
Where to fill the part time job – domestic salary paid directly to bank account, in ITR 2 ? Worked as a private tutor, institute is not big and not registered.
Could you please advice
sir, any idea on this please.
Where to fill the part time job – domestic salary paid directly to bank account, in ITR 2 ? Worked as a private tutor, institute is not big and not registered. Part time salary is 1,20,000
If its a Part time Salary receipts , it will come under Salary Schedule only. You can have Salary from Multiple people.
This part time job with salary received 1,20,000 is a small tutorial institute, as amount is small they have not provided any form 16 and so I don’t have there PAN but I have address.
will this be a big issue, if I enter this salary without employer PAN details.
kindly advice.
If you have a bank receipt or pay slip, that is enough. No issues.
Hello Sir,
I filled my income tax return recently.. I have started trading in FnO segment from sep-2016, and made a loss of 51000(approx) with additional brokerage of (19000). I didn’t show this in my return that i filled for my salary. Recently i come to know that if i file ITR 4 i can use this loss for 8 years from now. The thing is it needs to get audited as it is a loss (less that 6%..). Can i now file ITR 4?
Yep you can revise your returns. Use ITR3 (it is changed to ITR3 from this year). But make sure to file it before due date (31st july without audit, 30th sept with audit).
No need to audit?.. i am in loss .. it is less than (6%)
Can you check the chapter on turnover on if you need audit or not.
Sir,
as GST is concern, every professional get to registered under GST.
and those who owns trading (Futures and Derivatives) only as profession are required to get registered and follow the rules and regulation of GST??
coz nowhere, no one is talking abt this..
plz clear this doubt sir..
thanks….
No not required for trading only – unless you as a business are also into supply of goods or services.
sir,
you have mentioned in the above chapter 7.2 that in itr 4 both speculative and non speculative income can be taken. elsewhere you have said that intraday equity income should not be shown in itr4 ( ref. reply to aryan on 2nd april 17) kindly clarify whether intraday equity income (speculative ) can be taken as business income in itr 4
ITR 4 is now ITR3 and ITR 4S is now ITR4. Some of my answers to questions might hence seem off. This change has happened for this assessment onward.
sir,
my only doubt is whether intraday equity income (speculative) can be shown in ITR 4 ( itr 4s) for fy 2016-17 as presumptive income
No not possible. Best to use ITR3.
Hi Nithin,
i have speculative and non speculative business income, can I file ITR4( Itr4s previously) to show only 6% of entire turnover as my income and pay tax on that.
This is because my income from this source will exceed 6% even after deducting all expenses if I go for ITR3 (previously itr4).
Thanks,
Best to use ITR3 in that case.
Presumptive scheme to be opted for at least 5 Years. (As per Budget 2016) A new condition has been added to presumptive scheme. If you don’t follow presumptive scheme for at least 5 years than you lose all presumptive tax benefits. In short, File presumptive scheme for at least 5 years in continuation.
Hey there, Thanks for the all details which are helpful to everyone here 🙂
I am new to balance sheet writing for the filing the taxes. I need some help to understand the Funds(it is not so clear in the video by clearTax).
Can anyone help me to understand “Source of Funds” & “Application of Funds”in detail (& are all the number till 31st March?)
Hi Nithin,
I am filling ITR3-2017, I am showing income from FD’s and saving interest in P&L, do i need to show Bank FD details in Balance Sheet, if Yes, then which line of balance sheet i need to put it.
Regards,
MSP
In case interest is accrued then you can sum up the interest along with FD value. In Balance sheet it can be part of deposit or investment unquoted.
Hi Nithin,
While filing the ITR2 form,there is a typo in the permanent address which is mentioned.I have electronically verified the form.
Will it cause any issue in future ?is there any way how can I rectify it?
Your response will be appreciated .
Regards,
Preeti
You can revise the return. But there is no issue as all communication happens to your email address.
My salary is Rs 5,00,000/-PA and i have done day trading. Please advice which ITR to be filled.
Profit and turnover breakdown
Intra-day / Speculative profit 15183.30
Intra-day / Speculative turnover 228750.40
Short-term profit 0.00
Short-term turnover 0.00
Long-term profit 0.00
Long-term turnover 0.00
Total charges
Brokerage 57896.73
Turnover charges 19933.85
STT 76670.00
Service tax 10896.57
Stamp duty 12266.99
SEBI charges 1228.02
Total charges 179614.55
ITR3
Thanks ………do i need to have an audit ?
I have interest income and income from one house property. I have incurred loss in F&O trading. If I do not want to show the loss and pay my entire tax liability, can I file my return under ITR 1. Or since I do F&O trading I have to declare it and file return under ITR 3 and get my account audited by CA. Thank you
You need to use ITR3. Yeah, best to get audited. If you have other business income, you can set it off against F&O loss. Do speak to a CA.
Dear sir
If I calculated day wise business turnover from the ledger. face any problem in future from it departments?
Thanks in advance.
TOTAL YEAR CR + DR (EXCEPT CHEQUE RECEIVE & PAY,) = BUSINESS TURNOVER (WICH INCLUDE ALL TAXES ETC).
Best to consult a CA for this. No one really knows the right definition of turnover.
Hi Nithin,
In Pre XML it is showing zero entries for even for the entered sheets, what needs to be done.
Regards,
MSP
Hi Nithin, Can you suggest any CA associated with zerodha, who is based out of Chennai and who can handle my filing. I have tried to mail [email protected], but could not get any response.
Thanks
Dear Nithin, I am a salaried person ( 11lk pa). Opened demat this year (Aug 2016) primarily for investing. However tried some intraday and f&o trades for familiarisation with market. Following are the details- Intraday profit-461, Turnover-595. f&0 loss- (-9988), f&o turnover-186893. Short term CG- 2078, ST Turnover-32290. Please clarify the following doubts-
1- Which ITR form shall i fill ( i consider myself an investor for present and future purposes and i do not intend to do intraday/f&o trading in future, note- i was filling ITR-1 until last year)
2- I do not intend to carry over my f&o losses do i still need to consider earnings as business income and get my details audited. I suppose as i have f&o losses, as per this very informative varsity module on taxes, i need to get my audit.
3- In the module on taxes, you have initially written that first we have to decide whether we r trader or investor. Further you have written that even if we are salaried and did some trades, we have to fill ITR-3. IT website defines ITR-3 for persons have income from business. In my case, if i consider myself as investor and not a trader and i fill ITR-3 then i am indirectly declaring myself as trader and have to carry on with this view in future. Is this view correct. Please clarify. Whats your advice for me.
1. ITR3 this year. If you stop F&O and intraday, ITR2 from next year.
2. Yeah, you would need to. The other option is since your turnover is less, show 8% of your turnover as profit and pay applicable taxes on that. Do speak to a CA.
3. Even as a trader you are allowed to have stock holdings/investments. If you stop F&O, you can next year switch back to filing ITR2 to show your investments.
Sir , I want to know that if a salaried person is somehow involved in intraday f&o and short term trading but he is not a full time trader . And he has incurred loss in f.y 2016-17 but he doesn’t want to carry forward losses of intra day and f&o. so can he file ITR2 and claim for carry forward of short term loss on shares?? he intends to stop trade in intraday and f&o and become an investor. Reply asap.
Best not to Sunita. It is best if you can file using ITR3 this year.
Hi Nithin sir,
I am a salaried individual. I started trading in Oct-2016. I bought a few stocks worth 2.5k and I did Intraday trading also. Last year I have successfully filed ITR3 for this. This year (April2017-till now) I did not involve in any kind of trading/investment but I am still holding the stocks I bought previously. I don’t have capital gains as I did not sell my stocks but I received dividend two times (Rs. 12+30 = 42/-).
Can you please confirm if I need to file ITR1 or ITR2 this year?
ITR2 will be the best.
Balance sheet related — Can anyone help me to understand “Source of Funds” & “Application of Funds”in detail (& are all the number till 31st March?)
Nithin Sir,
I have two queries .
1) my net salary after 80c,80ccd deduction is below 2.5 lakh and my taxable income is zero, but i have done trading also and my total turnover in equity daytrading and FnO is 12 lakh and net loss for FY 2016-17 is Rs. 55000 ,
A)So i need an audit or not?
B) which form i should file ITR1 or ITR3
2) suppose due to complexities of ITR3 and To Avoid Audit i file ITR4 and show 6% of my turnover as profit i.e 1200000*.06=72000 , then i have to add this in my salary income and this way total tax workout for me is around 3000 rs . can i avoid this 3 thousand also by taking a term insurance plan . this will be a godd decision or not ? and dont you think that because this is ( showing 6% profit of turnover) non speculative business income so i had to pay Advance tax also .
thanx in advance
1. A. Need not. but best to consult a CA once.
B. ITR3
2. Yes, you can technically take that route. This is an aggressive stance, but can be taken. Yes advance tax required, but penalty will be quite less. Also, the way you are calculating turnover can also be an aggressive approach. Do speak to a CA.
To calculate turnover
1) i consider all Absolute values of Equity day trading
2) for Option besides absolute value i also include sell value of all options
by this way i have reached to total turnover of 12 lakh
i have not any delivery nor any future trade in FY 2016-17
Can you check the chapter on turnover. Explained in detail there.
i have income from salary 8 lacs….took loan 13 lacsks and did f&o trading with total turnover 1.8crores and net profit 8 lacs…Which ITR form should i Fill and do i need to get it audit…pls help me out..
ITR3, andn yeah best to get audit done.
My husband has deposited 8 lacs to my account and he has did f&O trading through my account…turnover went 1.7 crores and profit of 7 lacs….Which ITR form should i Fill and do i need to get it AUDIT? as i have no other income and the money of 7 lacs was deposit by my husband …pls help me out..
ITR3. If turnover is 1.7crores, then yes audit required. But you can take an aggressive approach to calculate this turnover to reduce it further and maybe get away with audit. Do speak to a CA.
Hi Nithin, Can you suggest any CA associated with zerodha, who is based out of Chennai and who can handle my filing. I have tried to mail [email protected], but could not get any response.
Thanks
ah donno anyone in chennai.
Hi! Can we itself file our return for F&O trading as only business(whether in profit or loss and below audit limits) without going for a CA?
please reply
yes
I am salaried person.
MY income is 10LKH
FY16-17 losses = 7LKH
Trun over for year = more than 10 CR
Which ITR form should i need to fill?
is there audit require ?
I have also losses in FY15-16 what should i do for that year ?
ITR3. FY15-16 is too late to file now.
SIR, besides my income from pension which is up to 4lakhs and interest earned on fixed deposits, i am also doing intraday trading wherein i have incurred losses with two brokers amounting to Rs. 2 lakhs. I would like to know from you the itr form which i have to use for FY 2016-17?Also in previous years i have used Itr 2 by showing the trading profit or loss under STCG.Please clarify.
ITR3 and this has to be shown as speculative income.
Sir I need to fill ITR 2, but interest received from friend is nearly Rs. 80,000 credited to bank only, bank FD interest Rs. 65000, I could only see one place in ITR2 under schedule OS there is Interest Gross, I have interest received from both bank and friend, these interests needs to be seperately under different schedules or should sum all and show at same place.
kindly advice.
Total interest income need to be summed up here including saving bank interest.
Thank you for unbelievable support.
I) As per your article Long Term Capital loss on shares is dead loss, and we show it in ITR 2 only for compliance purpose. But final xml generated by java based tool is showing LTC loss as
Losses of current year to be carried forward (total of row xi of Schedule CFL): 12000
Under Schedule CG: I have filled following ::
From sale of, (i) listed securities (other than a unit) or zero coupon bonds where proviso under section 112(1) is applicable or unit of a Mutual Fund transferred on or before 10-07-2014 (taxable @ 10% without indexation benefit)
Am I doing anything wrong. should I show Long Term Capital Loss at some other place.
Please advice.
Seems right what you are doing. But if you are not sure, best to take some advice.
As per some of articles in other sites, Long term capital gain / loss on shares, must be shown only under schedule EI, not under schedule CG, under schedule CG it is for long term capital gain for immovable properties etc.,
request you to let me know if you have different view.
Yeah in schedule EI.
I have incurred loss in intra day trading. If i show the same in ITR 4 then i will have to get my books of accounts audited. is there any other option?
sameer bakshi
July 10, 2017 at 4:37 pm
Hi,
I have income from salary 10 lacs , Capital Gain, short term capital gain and did f&o trading with total turnover 3 lacs and losses 60 thousand from F&OW, hich ITR form should i Fill and do i need to get it audit…pls help me out..
ITR3. Since turnover is very little, maybe you can declare 8% of this as profits and avoid audit requirement. Do speak to a CA.
Sir, my salary is 8lpa and intraday loss of 8000 where I can show this loss in ITR 2 so that I can balance it in next financial year ?
YOu can’t show it on ITR2, you need ITR3 and show it under speculative income
Can I fill ITR 3 without audit ??
HI Sir,
Do you have sample ITR 2 filled.
and also Non-speculative income Rs. 62000 ( but less than 6% profit ) and salary income nearly 4 lakhs means, ITR 2 with audit (or) ITR 4 with audit
pls advice
If nonspeculative business income – then ITR3 (was called ITR4 till last year) and yes with audit.
Since Total income becoming more than 2.5 Lacs, and there is Equity Cash- Intraday (Speculative) small turnover, and Equity Cash – Delivery based ( Non speculative ) both have Profits.
But total turnover well below 1 Cr ( nearly 20 lacs )
We have got ITR3 audited, these audited documents should I keep with me for future or upload it some where.
Kindly advice
Yeah, you should keep the ITR3 with yourself. If the CA has audited it, I am guessing he has already filed your ITR (upload to the income tax department). Do confirm with your CA.
Hi Nithin,
I need to file ITR 3 and cannot file ITR 4 (ITR 4S earlier). ITR 4 has option to specify 6% presumptive income, while ITR 3 has only Section 44AD(This is in schedule BP line item 35). Can we still show 6% presumptive income in ITR 3 and declare the same in Section 44AD entry?
Thanks
Ajit
yep, you can. Do speak to a CA though.
Dear Nithin,
Thank you for your earlier reply. I had one more doubt. I have salary income of 11lk pa.
Intraday profit 461, Turnover 595. f&0 loss (-9988), f&o turnover 186893. Short term CG 2078, ST Turnover 32290. But i have bank interest income of 66000. So for 6% criteria, total f&o loss adjusted profit(non-speculative)=66000-9988=56473. Turnover=186893 i.e profit/turnover=30.2% >6%.
1-Do i need audit in this case. For calculating audit requirement, can total profit be taken including interest income and total turnover as f&o turnover as for bank interest income, there is no turnover.
2- If audit not required, as i am effectively reducing my taxable income using f&o losses, is there possibility that IT dept may cause trouble. Thanks in advance
i m salaried person and salaried income is Rs 7.5 lac
INTRADAY/SPECULATIVE TURNOVER is Rs 48,389.05
SHORT-TERM TURNOVER is Rs: 80,674.65
Total loss for for FY :2016-2017 is Rs: -19405
NET REALISED PROFIT is Rs : -30,193.47
Can i declar the same to to income tax department? if yes kindly guide me which form i have to fill and how tO FILL?
Yes and ITR3.
Hi there,
Suppose Total Turnover from F&O is 4 Lacs in FY 16-17. and has a loss of 20,000
and if i opted for ITR 4s and declare my income @8 %…. which is 32,000 on 4Lacs, which is less than Taxable income.
is IRT 4s can be opted in this scenario?
is audit is Required?
Books of accounts is required to maintain coz profit is less than 8% and there a loss in that year?
and one more thing….. opening a current bank account is better option for those who trades in F&O??
some one told me if i will have current account IT department will not send me the compliances if i do my transaction through Current account with Zerodha account.. it that true?
Thanks…
Yeah it can be used. No audits on ITR4S. For F&O, you can continue with individual SB account, current account doesn’t give any advantage.
I have made a loss of 22,500 in last financial year and my annual income is 2 lakh. Should I get an audit? if yes, is there any way to avoid it while filing tax?
Since your total income is not taxable, you dont’ technically need an audit provided you don’t have turnover more than a crore. Check the chapter on turnover to know more.
SIr, I have intraday gross prfit is = -1291,short term gain =2268 and total charges is 3410 while in option profit is 6500 and total charges is 11300.
I have net turnover is less than one crore. Which ITR should I used and charges paid are to included in loss or not..I have annuual income of around 12 lakhs.
ITR3 and yes charges can be added to the loss.
SIR, MY main source of income is stock market . I have Intraday Profit =37201 (TURNOVER i.e. sum of both positive and negative differences = 265157), Short term capital gain profit = 334038 (TURNOVER i.e. total value of the sales = 13506866) and Loss in FNO = -35053 (TURNOVER i.e. 598019), I dont want to audit my book. if i show my intraday profit as business income , which is 6% > Intraday turnover and if i show my Short term capital gain profit under SHORT TERM CAPITAL GAIN SECTION and if i dont show my FNO LOSSES is there any problem in future ?, can i file ITR 3. Is It A Right Way To Do This ?
You need to declare all your income and trades. Not showing is not the right thing to do. Yeah ITR3.
sir, if i have 200000 short term gain profit and only sale side turnover is 7000000, that means my short term profit is less than 6% of the turnover. if i show this profit under SHORT TERM CAPITAL GAIN then any need to audit my book.
If you have capital gain, there is no concept of audit. It comes only in case of business income (intraday/F&O). You dont need an audit.
Dear sir, i have intraday loss 50000 ,turnover 300000 and i have delivery profit 220000 and i also FNO loss 25000,Turnover 225000, if i show profit in intraday 25000 which is >6% of intraday Turnover and if i show FNO profit 25000 which is >6% of FNO Turnover and if i show delivery profit under short term capital gain , then am i liable to pay tax on 20000 on 10% rate . Is there audit required.
If your profit is >6% no audit required.
SIR, CAN I SHOW MY INTRADAY P/L & SWING TRADE P/L BOTH IN UNDER SPECULATIVE BUSINESS INCOME AND FNO P/L UNDER NON-SPECULATIVE BUSINESS INCOME. IF YES THEN AFTER ADJUSTING MY TRADING EXPENSES IF MY INCOME EXCEED 250000/- THEN IS IT TAXABLE AS PER NORMAL SLAB ? IF I CALCULATE TURNOVER i.e. sum of both positive and negative differences IN ALL THREE CASES & IF I MADE PROFIT >6% OF THIS TURNOVER NO NEED ANY AUDIT. CAN I FILE IT BY MYSELF ?
Swing equity trade is non-speculative or capital gains. Yes if income exceeds 2.5lks, u will be paying as per tax slab. Even short term capital gain tax of 15% is not applicable if your total income is less than 2.5lk. Yeah, you can file it yourself.
Sir,
What is Swing EQ trade?
Thanks.
In a swing EQ trade, you buy stocks today with an intention of selling it at a higher price over the next few days.
not maintained books of account , i need my turnover for the last two years, how to get it
Hi Nithin,
First of all I must tell you that I admire your energy and drive to answer the queries on this forum personally. I really appreciate and am thankful for the user friendly , simpler , low cost and transparent/ informative Eco system created by you and team for traders in India.
Coming to the question, I am trading with zerodha in futures for last two years and I have been filing ITR 4 with audit. I understand that ITR 4 has been renamed as ITR 3 from this year . Do i need to file revised ITR formats for previous years as I want to carry forward the losses.
Regards
Pranay
DP1501
Thanks Pranay. If you have filed ITR4 last few years declaring the loss within due dates, no need to revise (govt deciding to call ITR4 as ITR3 is applicable only from this AY). If you haven’t declared the loss, you can’t do it now and carry forward it.
Hi Nithin,
From this year I’ve been trading with Zerodha. Last year I was with other broker and I filled my profit and loss of my trading statement given by the other broker was quite straight fwd and that was accepted by auditor. But this year I gave zerodha statement to auditor and he is not accepting since it doesnt contain the dates of my bought and sold. He is asking simple trade statement which contains bought date and sold date and most imp profit and loss of every trade. sample is below . Your trade book doent contain a P & L of each trade . Pls let me know how to get from zerodha as early as possible.
Buy Date Scrip Code Security Name + Quantity + Net Rate Bought Amt – Quantity – Net Rate Sold Value Sell Date Weighted Avg. Balance Qty Profit:Loss
Thanks a lot . Very happy with Zerodha’s customer oriented approaches. Good going . Best wishes.
Vijayendra
Vijayendra, can you email me the old statement of yours to [email protected]
SIR, IF I HAVE LOSS IN INTRADAY OR FNO OR DELIVERY TRADES , IN ALL CASES AUDIT MANDATORY.
Can you check the chapter on turnover.
Hello sir,
1, How to check shareholding pattern of a company. For example for Eicher Mototrs in moneycontrol.com I am just able to see Individuals / Hindu Undivided Family are holding 3.4% shares. But I am not able to see their names, so how to check their background?
2. How to check who are the promoters for this company?
SIR Please me..
I am new as it is my first itr process and only few days left.
Here is my case.
I am govt. Servent.
My net salary after deduction is 410000.
I also do trading in delivery and total loss is 15000.
Kindly tell me.
1. Can a govt sevent do trading
2 if yes, then which itr form should i fill.
1. Doing delivery based trades should be okay. Best to find out though.
2. ITR2
I got profit 38000 in last year(2016-17) in equity, short term. I have 6Lac salary. But i didn’t took money from zerodha account. I invest profit amount again in some other shares. Do I need to pay tax. 15% ??
Yes, you need to.
Hi,
Do we need to add mutual fund and lic investment in proprietor fund of balance sheet in itr3 which are long term investment?
Thanks,
Yes
Hi Nithin,
I am a salaried individual with commodity turnover of 4.5L, with net loss of 28K. I believe reporting 8% profit under 44AB in ITR4S will still require me to pay 8%*4.5L = 38.250K. What if I do not report the loss at all? In that case, I may not be able to offset the gains in the coming years, but I am fine with it, as it saves me the auditing hassle/8% tax, both of which are equally/more expensive. There is no loss to the government/tax evasion in any way, this year of later, which makes me think this approach is fine.
Please suggest if I am correct.
~Shailesh
You will have to declare your trading income on the ITR. If you declare, there is a turnover and there is a profit/loss. Either you show as loss and audit to carry forward this loss. Or else you have to show a profit.
Hi Nithin,
I am a salaried employee with tax slab 2.5-5 lakh. I have tried different trades out of curiosity and here is my loss/turnover.
For AY17/18
Intraday equity loss: 1300. Turn-over 1500
Short Term Gross Loss in Equity (STCG) – 4000 Turn over 77000
F&O Equity loss – 4000 Turn over 8000
Commodity F&O Profit – 2300. Turn over – 25000
As I am on overall loss and turn-over is less, can I skip mentioning STCG and file ITR4-S(ITR4 now) by showing 6% profit of total turnover of F&O’s only?.
I want to skip auditing.
Also I filed my ITR1 already. Now i can see only ITR4 option in my Submit form option. Hope revised return is applicable for this.
Best to use ITR3, what you can do is since turnover is less,show 6% as profits and pay tax on it accordingly. So turnover on 1lk, 6% is 6k profits, and in 10% tax slab that is around Rs 600 in tax. You can skip audit this way. But consult a CA.
I am a salaried person.
income from salary 2.6lakh
intraday profit = 4293
intraday turnover = 15863
short term loss = 5546
short term turnover = 237839
which itr form will be suitable for me ?
will i have to pay tax for intraday gain?
ITR3. Yeah, 10% tax on intraday.
Why delivery values are included in P&L in your example? As per explanation given earlier, only intraday and derivatives transactions should part of P&L.
Purchase of Shares 150,000 Sale of Shares 100,000 (Equity Delivery)
Delivery trades are part of capital gain (Schedule CG). Do we need to repeat same in Schedule P&L also?
We show it in P&L. On your ITR you can show it as capital gains.
Thanks for reverting on this. Confusion is it is also shown in ITR as per attached example in ITR section “Profit and Loss” > 1 > A > iii > c. Also Sales is added in “Profit and Loss” > 6 includes delivery sale of 150,000.
Income from business and profession is computed in ITR includes delivery trades as well. Same repeated in Capital Gain (Schedule CG). This is case of double taxation.
Please check.
hello sir, i am salaried person. i do intraday only. and had a loss of 1253 rupee in F.Y 2016-17. which ITR i bave to file. If it is ITR4 then where to show this loss in ITR4
ITR3. Do consult a CA to fill your ITR if you are not sure.
QUERY:
1. Please show how to show +ve and -ve turnover it in P&L? What does positive and negative turnover mean? And what about purchases?
Gross receipts: +50000
Gross sales: -30000 ??
How to show profit and loss on balance sheet?
You can show all positive turnover as gross receipts, and negative turnover as gross sales.
2. If all of the turnover comprises of speculative intraday trades, is section 44AD applicable to it? Can I declare profit of 6% for speculative transactions and get away with tax audit if my turnover is lower than Rs.2 cr?
Another case, say, Speculative purchase: Rs.1000 and speculative sales: Rs.900, Option purchase: Rs.100 and option sale Rs.102.
Since there is a loss of Rs.100 on speculative trade and gain of Rs.2 (2%) on option trade, is tax audit applicable? Can i declare 6% in 44AD?
1. Best to consult a CA to fill your ITR. Very tough to explain how to fill here.
2. Yes.
3. Speculative and nonspeculative business have to be kept separately. But yes, the example you gave audit will be needed.
Hi,
Can I get the buy and sell date of each shares in zerodha account. I checked in the Q-back office , but didn’t get. please help me where can i get it.
Thanks in advance
Go to reports and search for tradebook.
Hi Nithin,
I started individual trading on Zerodha since March 2017. So my turnover for FY 2016-17 is 2 lacs with profit of 20,000 through F&O transactions only with no other source of income. Please let me know if I should submit ITR form 4 since I have a turnover of less than 2 crore with no book of accounts maintained or ITR form 3 since going forward I may exceed the mentioned limit as well as have intra-day & delivery-based transactions?
Thanks.
ITR3 is always advisable.
Thanks Nithin.
I understand for no auditing required and no books maintained, we just need to fill a small section and not the entire Balance Sheet and P&L.
(1) For 6c: Amount of total stock-in-trade – Shouldn’t this be our current value (investments in equities, F&O, Mutual Funds, etc (as of March 31st 2017)? If this is correct, where can I get this past info for zerodha?
(2) What is the difference between 53ia: for assessed carrying on business and 53iia: for assessed carrying on profession? Please let me know which is relevant for an individual trader.
Thanks.
1. Investment in Mutual Funds for a trader can be stock in trade. But normally they are kept for long term so no need to show this. Equity can be. Futures and options can be.
2.Business:- normal trading activities and other than done by qualified professionals
Profession:- opposite
The two categories = business *8/6% of turnover whereas profession 50% of turnover
Business is relevant to the normal trader.
Unbelievable support from you guys as always!!!
Thanks a ton Nithin 🙂
Hi Nithin,
Have read the chapters on varsity on taxation. Thanks for such detailed info.
Kindly advice on my case as it seems CAs have no idea what to be done here. Looking at the confusion and amount of expenditure for audit etc it seems I would need to do away with intraday& F/O going further.
Basically I want to avoid audit and books & account by showing profit @6% of turnover(intraday + F/O) as turnover is just 4lac. Is it even possible with ITR3.
Due to Intraday(speculative) I cannot file ITR4 and have to fill ITR3. I have STCG as well.
1)Mainly I wanted to know that what can be filled for below.
Amount of total sundry debtors
Amount of total sundry creditors
Amount of total stock-in-trade
Amount of the cash balance
2)Do I need to fill PART A-BS for Proprietor’s capital, bank balance etc as well. I filled just the 4 items in sec 6 for no accounts case.
3)Do I need to fill anything in schedule BP i.e. separate intraday and F/O turnover. I have only filled the Gross receipts as total turnover and gross profit @6% of turnover in P&L sec 53
Thanks
Sir
I am trading only F & 0
No any other income
Which itr form should be filled for fy 2016-17
ITR3
Dear Nithin,
I opened trading account in zerodha before 4 years.Due to an accident I lost my job before 5 years.
Started full time trading (Scalping) from last year by getting a loan from axis bank. I m in big loss but my turnover is above 2 Crores. I am in loss , so do i want to pay tax?? Is sep 30 is last date? Please explain me , I can pay directly or it should be audited??
Equity
INTRADAY GROSS PROFIT₹6,622.75
INTRADAY TURNOVER₹6,622.75
SHORT TERM GROSS PROFIT₹-6,737.10
SHORT TERM TURNOVER₹4,14,577.45
LONG TERM GROSS PROFITN/A
LONG TERM TURNOVERN/A
TOTAL CHARGES₹1,535.06
F&O
FUTURES GROSS PROFIT₹-8,916.50
OPTIONS GROSS PROFIT₹-87,244.00
TOTAL GROSS PROFIT₹-96,160.50
FUTURES TURNOVER₹15,935.50
OPTIONS TURNOVER₹1,98,47,691.25
TOTAL TURNOVER₹1,98,63,626.75
TOTAL CHARGES₹79,323.75
Waiting for your reply..
As per Income Tax act.. In case of equities Segment..there is no turnover concept only Short term Capital gains/losses and Longterm capital gains/losses to be reported in the ITR form.
In case of F&O segment Turnover concept is applicable but Turnover is calculated as eg.
eg: 1.Buy price- Sell price= Profit/Loss
1.23568-17468=-6110 Loss
2.15687-45867=30180 Profit
3.23500-97460=73960 profit
4.102387-47860=-54527 Loss
In the above case turnover is Positive and Negative outcome of a transaction/trade is considered as Turnover.
So the turnover in the above case is 6110+30180+73960+54527=1,64,777 this 164777 is the turnover..
by using the above concept check ur turn over has reached 1 Crore or above..
Tax Provision
a) In the case of profit from derivative transactions, tax audit will be applicable if the turnover from such trading exceeds Rs. 1 crore. b) Tax audit u/s 44AB r/w section 44AD will also be applicable, if the net profit from such transactions is less than 8% of the turnover from such transactions
Thanks Dileep Sir,
As you said to calculate by
Buy price- Sell price= Profit/Loss, I made a turnover of 8,85,000.
I made a loss of -1,80,000 including brokerage fees.
After an accident before 5 years , I m not working, I dont have any other income. Just learned stock market and left my loan money in fno trading..I learned that I am not fit for trading in fno.. but equity is safe.. Daily I am learning learning about equity stocks and strategies..
In this case , if I dont have any salaried income and my turnover is 8,85,000 & overall loss is -1,80,000 from Capital amount. What should I do now? How to fill tax?
Please let me know.
No need to pay tax if there is a loss. You can add your interest cost and carry forward this loss to next 8 years and setoff against all future profits. Since your turnover is more, do get an audit done and yes last date for audit is Sep30th.
The ITR -3 form shows Add option for STCG u/s 111A. Should I show all my transactions separately transaction wise or can I just sum up them to show Consideration and cost of Acquisition. Please suggest me
Sum up everything and show.
When can an Option contract fall under STCG
It can’t, it is always business income
Hi Nithin,
Under no audit case(business income), Are we not eligible to show the expenses like brokerage fee, stampduty, STT and other charges ?
Thanks,
Anand
You can show. But profit has to be 6% of turnover
Thank you !
Hi nithin in case of trading under as propreitorship
1) does commodities derivatives and currency dervatives Profit/loss considered as nonspeculative business income/loss
2)Does commodity derivatives and curency derivatives profits/ loss be merged with equity ,ad can one setoff commodity, equity and currecy profit/loss against each other
3)does total calculation of FNo turnover include commodities and currency turnover
4) after the Gst inplementation, Gst is already getting deducted along with brokerage, does a trader have to pay separate gst to the government based on turnover?
1. yes. They can all setoff each others profit and loss
2. If you are showing equity delivery based trades as non speculative business, then yes they can be setoff. If you are showing as capital gains, no it can’t.
3. Yes
4. No separate GST to be paid.
in the second question, i written equity, means i was saying equity FNO, i forgot to write the word FNO
Yes, I answered it as if it is F&O
Thanks for your answers
Hi Nithin,
I have a general query regarding trading . I work for a bank. I do intraday trades in F&O segment only. No equity trades. I have declared my zerodha account to the employer while joining.
1) Is it possible for my employer to track trades being done by me using PAN number etc.
2) Do you share such data with companies/ employers regarding trades done by your customers.
Regards
1. No
2. No
Hi Nitin,
In case if my F&O turn over is 80lac and total expenses incurred is 20k. So shall i declare my turnover in ITR4 as 80lac-20k.
regards
ITR4 or ITR3? Turover that is profit and losses and expenses all come under different heads.
Hi Nithin,
My turn over is Rs. 10,00,000, Total Short-term profit is Rs. 59000, Total Charges (Brok,STT, etc..) is Rs.7000.
Believe i can show Total charges as expenses and so the Total profit is 5.2% of Turn over.
And also have Rental income Rs.150000. No salary and no other income.
With this, please help me to understand following
1. Though my total income (including Capital gain) is less than 2.5 L, do i still need to pay 15% tax for the above Short-term profit ?
2. Which ITR form to be filled for my case?
3. When is the last date for filing ?
Thanks in advance…Regards.
1. No, not required.
2. ITR2
3. Aug 5th – yesterday.
Hi Nithin,
Thanks for Prompt response.
For #1 I forgot to mention that am declaring “Non-Resident” as am currently working outside India on this FY.
So, believe i should need to pay 15% tax for this STCG of Rs.59000 ? Pls confirm. Sorry, i searched in detail on this article but couldn’t find the case of “Non-Resident”. May be somehow overlooked.
Regards.
Yes, if you are a non-resident then 15% flat.
Hi,
Can you suggest me right ITR form. I only trade in equity intraday and BTST. No Other income source. I am full time trader.
My intraday loss = 75 K
intraday turnover = 1.5 L
Short term profit = 21 K
Short term turnover = 15 L SO NET LOSS = 54 K
Overall I’m in loss but I don’t want to carry forward.
ITR3 is what you need to use.
Can I use ITR 4
Intraday or speculative income can’t be declared on ITR4
Dear sir
my salary 8,50,000
I traded only nifty futures turnover tradewise is 98,000
long term(equity holdings) capital loss -40,000
mutual fund investment ELSS scheme 80,000
realised profit(loss) is –9,000
unrealised profit (loss) is –33,000
1. is audit necessary
2. book keeping required
3. which ITR form to fill
Thank you sir
1. Technically yeah. But since turnover is small, you can declare 8% of this as profits and pay tax on that to avoid audit.
2. If audit, then yeah. Otherwise no.
3. ITR3
Sir
Is this 8% or 6%, because in FAQ s it is given that for AY 17/18 it is reduced to 6% from 8%.
Also in FAQ s it is also said that if capital gains are there ( which I
I have ) then it is not possible. Which is correct ? Please kindly clarify my doubt.
1. 6%
2. If there is capital gains, you don’t need to consider it for turnover as it is not business income.
Dear sir
my sister have no other source of income
traded only nifty futures turnover tradewise is 78,000
realised profit(loss) is –34,000
unrealised profit (loss) is –9,000
1. is audit necessary
2. book keeping required
3. which ITR form to fill
Thank you sir
1. No, since not in taxable bracket.
2. No
3. ITR3
Dear sir
my friend has about 70,000 annual income through watch repair
traded only nifty futures turnover tradewise is 8,600
realised profit is 8,600
unrealised profit (loss) is –33,000
1. is audit necessary
2. book keeping required
3. which ITR form to fill
Thank you sir
1. no
2. no
3. ITR3
Hi Nithin,
past 3 years I have filed ITR 4 with tax audit by CA since i had loss which needs to be carry forword in coming years. This year FY 2016-17, i have only salary income so i filed ITR 1. so i have not mentioned the previous years losses which was declared in previous years ITRs.
please suggest what i did is correct ?
whether i can carry forward those previous f and o losses within 8 years.
Thanks,
Venki
yep correct.
Sir,
what documentation should maintain while taking 5Lac (NEFT) from relative as Loan?? for commodity trading purpose only..
to satisfy IT Department.
Thanks
hmm.. no specific document, as long as the bank entry shows credit through a bank transfer, it is okay.
It’s really a very good work to spread the fragrance of knowledge. I appreciate you and your team. For a long time I want to trade in commodity through MCX . But I am confused a little bit with taxation . I’m a salaried person and want to know how I show my profit in my return file if I do . Actually I do file from itr 1. If I do the trade then do I have to fill the other form and I am to treat as Businessman . I have to audit my account by a chartered accountant . This is the confusion and help me please . Thanks..
Yeah Rajib, you will need to use ITR3 to declare your commodity trading income. Show any earning as business income. Business income doesn’t mean businessman. Many salaried people have multiple source of income. Audit is required if your turnover exceeds Rs 2 crores – do go through all the chapters.
Dear Nithin,
Can you please let me know which ITR form do I need to use to file my returns with the following details:
1. Interest Income
2. Agri income greater than INR 5000/-
3. No Salary.
4. Withdrawn Employer PF.
5. F&O, Intraday and Short term delivery trading with loss.
Actually, I consulted a CA and he filed my returns through ITR-2 without any Audit. The only thing he confirmed from me was that I made loss. As I understand from your explanation, I guess my CA should have used ITR-3. Kindly clear my doubts. Also, I wish to know whether I need to re-file my returns using ITR-3.
Appreciate your answer.
Regards,
Sharanu
Yes ITR3 and do declare your trading losses.
Dear Nithin,
Thanks for the reply. Are you suggesting me to revise my returns? How big is the mistake to have used wrong ITR form?
Regards,
Sharanu
Yeah, you should revise. IF you haven’t evaded any taxes, it isn’t a big mistake.
Nithin,
I have below income heads:
Salary income = 16 lac
Loss on house property (home loan) = 2 lac
F&O profit = 80000 (on turnover of 4 lac approx)
Delivery trading short term gain = 10000
I believe I can’t file ITR 4 presumptive income as it is not having Capital gain. Can I file ITR 3 with ‘No account case’ ?
Yea you can use ITR3 no account case.
Hi Nithin
I have 9.6 lac profit from intraday and delivery-based equity ( 1 year).
I have paid around 1.23 lac as STT, Rs. 14000 as SEBI-fees and transaction charge and around Rs. 10000 as stamp duty.
I assume that I don’t need to pay tax on long term equity gain i.e. 6 lac and I need to pay tax 15% on above 9.6 lac intraday-delivery-equity profit. In my ITR, 9.6 lac is business income and 6 lac is exempt capital gain.
Can you pls let me know if I can subtract the STT, SEBI-fees and transaction charge and stamp duty charges from my 9.6 lac profit out of intraday-delivery equity?
Or, is it the case that these STT, Sebi-fees, transaction charges, stamp duty charges can’t be subtracted from the profit arising out of intraday-and-delivery based equities even if this is shown as business income?
Regards
Ekta
Intraday is a business income, so you can subtract all these costs as expense and pay tax on net profits. Btw for intraday you have to pay as per income tax slab you fall in. For short term gain it is 15% (equity delivery short term trades). For equity delivery, STT can’t be deducted. But you can show the rest as cost of improvement of the stock and hence book an expense. Suggest you to go through all the chapters here on taxation.
Sir,
I am a salaried individual working in IT sector.My annual salary income is Rs 5,20,000.I have invested in share market and made both short term as well as intraday gains. My intraday and short term profit is to the tune of Rs 10,000 each.Which ITR form will I need to fill?
Note: All my trading is in equity segment
ITR3
Dear Nitin Greetings
Its great work you and your team has done with Varsity module. People like me who are new to Share Market gets great help.
I do not have any other source of income.
I would like to clarify a few things:
1. In FY 16-17 i have incurred a loss of 3.5L while trading F&O segment with a turnover of 18L
2. Do i have to get audited for this.
3. Which ITR should i file
4. Can i add expenses of 25000 + other expenses of 10000
5. If i don’t file ITR this year will there be any problem (can i file after 2 years)
6. Do i need to keep books of accounts
Thank you
Abhay
1/2. Since no other income, no audit required. But make sure to file your ITR.
3. ITR3
4. Yeah, any expense incurred towards trading can be.
5. Yes, best to file this year. There is a chance of getting a notice asking why it wasn’t paid.
6. Not mandatory, but it is a good practice.
hi Nithin,
thank you for such informative article. still i have doubt as i an quite new at all this..
i have just started trading on zerodha. also i have some mutual funds which i would be keeping minimum for 3 years.
i have done intraday trading only once on zerodha in which i got around 350rs profit. i have almost 4 lakh stocks from infy and some pharma companies which i would keep for long term minimum 3 years.
i am salaried employee in IT sector.
could you please tell me how should i fill my tax now.. which ITR form etc.
thanks for your help.
ITR2 to show all your mutual fund and equity investments. Do go through all chapters, has all other details u need.
Sir my income details is –
intraday profit -3387 and turnover 10518
STGP -2753 and turnover 70301
LTCG 107732 and turnover 625024
F&O 46402 and turnover 580160
Curr. F&O -70114 and turnover 173574
MCX F&O -37239 and turnover 44231
my query is-
1. Which ITR Form to filed.
2. Is audit required.
3. For ITR Filling Tradewise Details is required to feed in any segment or yearly Profit or Loss to Feed in all segment or any other way to feed details.
thanks in advance
1. ITR3
2. Yeah, best to get it done. But if your total income is less than 2.5lks and no tax to pay, then you can avoid.
3. You just need overall P&L.
Sir i have start intraday treding 2013to2015 fy13-14 loss4lak fy14-15 2lak loss turnover 5cror bank tranction rs10lakh ih recive ITD notice nonfiling incom tax return 2013-14 pansummery and why uou can not filing fy15-16 return what i do plese give mi soluction
Shankar, you have to explain why you haven’t. Explain that you didn’t because you had losses and thought no need to file ITR if no income.
Sir
1. I have invested in DSP black rock MF, time period for which till the end of this financial year will be less than one year i.e i have invested in this MF in august this year. Will profit in this MF be termed as short or long gain?
2. i was alloted ICICI lombard IP0 which i sold it the day it was listed at a profit of Rs 1,000. but instead of withdrawing the funds i re- invested it in other stock. now profit is not showing in P and L in Q. kindly guide on this issue.
thanks
1. Only if you exit or redeem, the profit will be determined as STCG. If you redeem after 12 months from when you buy, it is long term.
2. Check this link: https://tradingqna.com/t/how-to-buy-d-mart-ipo/10597/6. If you can add the buy price of your IPO, it will start showing up on P&L. But this Rs 1000 will be your short term capital gain.
hi, Nithin Kamath
I wanted to ask if someone suffers a loss in trading this year say 10% and he has an account with xyz broker until and unless he doesn’t cover his losses he won’t be taxed.But if he opens another trading account with some other broker and makes a profit of 5% will he be taxed on 5% profit but in reality, he is still in a loss of 5% ?assuming all of these things happening the same year
Sahil, when filing ITR, you combine your P&L from across all brokers and then file. So no, you don’t have to pay any tax if your net loss for the year is 5%.
Dear Nitin,
1) I have carried forward my loss in F/O, in FY 2017 duly audited by a CA.
2) Can I set it off against my other business gains (not form F/O) for next 8 years or till it completely sets off (whichever is earlier) ?
3) Do I have to file audited return every year till I set it off ?
4) Can a notice be sent on audited return as well ?
thank you
Sumit
2. Same year you can set off against any income. From next year, it can be setoff only against F&O profits.
3. Not required
4. Yes
2) So I have carried forward my F/O loss in FY17 and from FY18 onwards I don’t trade in F/O and take a trade licence for wholesale sale of medicines and make profit out of it. Point here is that, can I set off my losses from F/O trades done earlier with profit from current wholesale business? As both these activities are business.
Again grey, some CAs say possible, some say not.
Please can somebody throw more light on this subject.
Thank You
Sumit
Dear Nitin,
I intend to do intra day trading soon with a capital of 6 lacs daily which means turnover of Rs.1.2 crore per month, this will be approx 14.5 crore per year,
If my profit is approx 1 lac per month i.e 12 lacs per year should i file my return in ITR 4 or other return as under presumptive tax my profit will be less than 8%. Should I have to get my accounts audited. I am confused.Please guide me.
Narayan, turnover is not contract wise turnover, it is sum of profit and losses. Check the chapter on turnover https://zerodha.com/varsity/module/markets-and-taxation/
Hi Nithin
I have around 6 lacs of long term capital gains (LTCG) and 75000 of long term capital loss (LTCL).
LTCG is already tax exempt.
Can the above 75000 long term capital loss be carried forward to next years? And for how many years? And can they be offset in future for any capital asset if there is profit in that asset in future?
Thank you
Ekta
Ekta, you can’t use this long term capital loss for any purpose. They can’t be offset as LTCG is exempt. So no point carrying forward.
Dear Nitin,
I carried forward my F/O losses using audited return in FY17.
Now, if I miss the deadline to file ITR in FY18, will I not be allowed to further carry forward the losses I incurred in FY17?
Thank You
Sumit
I AM SALARIED EMPLOYEE I DO INTERADAY TRADING AS WELL AS DELIVERY BASED TRADING. WHICH ITR I SHOULD FILL. I HAVE ALREADY FILLED ITR2. SHOULD I REVISED IT OR IS IT OK
TKS
ITR3, yes best to revise.
Hi Nitin, thanks for wonderful article.
I am a house wife, I have no salary, but I use my husband’s money for equity intraday trading and I have saved some money in equity Mutual funds. My total turnover is below 250,000. By reading this article I understood following details but I am not sure. So please let me know if I am wrong.
1. I have to file ITR-3 as I have LTCG/STCG as well as business/profession (Intaday –
Speculative income).
2. Since my income is bellow 250,000, I no need to maintain any Turnover, Balance Sheet, and P&L.
3. No need of CA audit even if I want to carry forward my losses or If I make profit less than 6% of turnover.
4. The money I get from my husband can be considered as gift and will not attract any tax.
I will be very thankful if you can confirm these things.
1. Yes
2. Income below 2.5lks, so need of audit. But do maintain balance sheet, P&L and file your ITR.
3. Yea
4. Yes
Thank you very much for clarification
nice explanation.
Nithin, Excellent article. Thanks.
I am helping my Mother manage her portfolio after her retirement. As many salaried government employees, she only has investments in FDs and PPF. As FD interest is going down and also need to pay TDS on interest income, we want to diversify that and put some 20-25% in dividend-paying equity or dividend MFs.
It will help me if you can confirm some of my understanding.
1. With pension income + FD interest + Dividends from delivery equities and MFs + LTCG from the sell of delivery equity and equity MF, and no intention to trade in F&O, commodities etc. Only ITR2 is required. I understand that ITR1 can’t be done as, though there are no tax implications, I will need to show those dividends and LTCGs to the taxman.
2. If once in a while I had to sell delivery equity and take STCG – I can still file ITR2 and pay STCG tax as per the slab. This I can do as I am going to maintain continuity in filing tax as the non-business person.
3. For the business person(trading intraday, F&O etc.. on top of a salaried job), STCG can go either in capital gains(ITR2, Investor) or ITR4(Investor + trader) as far as continuity is maintained – right?
4. If there is STCG loss- situation gets tricky. If it is small loss – better to include it in ITR2 and continue filing ITR2. If it is a big loss and intention is to carry forward or offset other gains by STCG loss, file ITR4 – but once you start filing ITR4, you would need to keep filing it to maintain continuity?
Would appreciate any guidance. This will help me to manage both mine and mother’s portfolio.
This is assuming that income from the pension is more than 3L(for senior citizen).
1. Yes
2. Yes
3. Yes
4. Yes. Btw, ITR4 is now called ITR3 (from FY 17/18)
Sir my yearly salary is approximately 4lks and am also trading in interday and delivery in stock market. Kya muje profit&losses ke case me trading ka tax pay krna prega.
Only in case of profits you have to pay tax.
I am a zerodha trader and intend to do day trading.Apart from share trading I have no other income from business or salary. Can I file ITR 4 under presumptive tax? If my earning is 6 lacs in a year do i have to pay tax on entire 6 lacs or on 6% of my turnover and should get my account audited?
Would appreciate your reply.
Best not to take the presumptive tax route. You will have to pay tax on 6lks as per the income tax slabs.
if i buy 10 shares of infosys on nov 26,2017,buy another 10 shares of infosys on dec 26,2017,buy another 10 shares of infosys on jan 24 2018 then sell all the shares of infosys on nov 26,2018 then will it be long term capital gains or short term capital gains?
10 shares you bought in nov and sold after 365 days, will be long term. Rest short term.
Hi Nitin,
I am a salaried person earning 6 lpa. I buy stocks and mutual funds from the long-term perspective. I have around 70k invested in stocks and mutual funds as of now. Which ITR form should I fill?
ITR2
1. I am a Salaried Employee. Last year I opened my Trading+Demat account mainly for the purpose of Long Term Investments.
Since now i do not have any Short Term or Long Term gain Can i file ITR 1 only ?
2. Do i need to show my long-term Investment while filing ITR ?
3. After few years in case i have sold my shares and got Long term gain. Do i need to file ITR 2 or ITR 1 ? Long term gain is not taxable right.
4. However in ITR 2 form para 4(b) there are two types with Long term gain taxed at 10 % and 20 %. How do i show for no tax liability under long term gain ?
5. Shares brought on March 2015 and sold on April 2016. Does this come under Longterm gain with no tax liabilty right. FY will be 2016-17 and AY for ITR filing will be 2017-18. Is it right.
1. yes
2. yeah, best to.
3. ITR2, you have to show exempt income as well.
4. Under exempt income.
5. Yes, anything held for more than a year is long term.
1.How employee with Long-term Investor in stocks should file ITR-2 when there is no income from STCG or LTCG and in case no dividends also recieved till date.
2.Whether Mutual fund invested in Current FY 2017 -18 also to be shown as Investment in AY 2018-19
or
ITR filing showing income from Mutual fund only whenever i receive dividend ?
1. If there is no income, no need to use ITR2. You can use ITR2, when you sell and have an income.
2. Whenever you receive dividend or when you sell them.
Hello,
Sir in above comment, ‘If there is no income, no need to use ITR2. You can use ITR2, when you sell and have an income’, Do you mean that, if there is no trading activity besides investing filing ITR not mandatory?
Thanks.
Yes, but ideally best to file ITR every year.
Sir, my only income is from trading in equity delivery. My profit is 5.41 lac and loss 1.31 lac then how much tax i will have to pay sir ?
You have to pay as per income tax slabs on 3.9lks. Check the first chapter.
hi sir ,I am working in a private company getting 2.4L per annum, I started trading in august-17 and I got losses 40000 by doing trading in options (from august to november month) Which ITR(i itr1or itr2 or itr3 or itr4) i have to apply because I want to carry these losses to show in next year .what is last date to apply ITR.
ITR3
Sir,If my income crosses 2.5L (bank interest and with company bonus) which ITR have to apply .I am started in the august -2017. which is the financial year for calculating ?to carry my losses (40000)in the next financial year when to I apply ?Last date to file returns for my scenerio sir?
ITR3 and FY 2017/18. You have to file by JUly 2018
Hi Nithin,
I had made some profit from investing in a share few days back. I had purchased all the shares from the available balance in my account, it was not a intraday trading. But I sold the shares on same day. When I check reports — Tax P &L of q, it’s showing as Intraday Gross profit!
It should have been short term gross profit right!? Since I have not used intraday margins like 3x, 10x or 12x – depending on the company
Please clarify the doubt.
Thanks,
Acharya
Acharya, it doesn’t matter if you use intraday leverage or not. If you buy and sell same day, it is considered as intraday/speculative trade.
Hello Nithin,
First of all great article, have gone through all the chapters. I have been looking for this information for ages now and finally landed up here. (Thanks to Zerodha).
I just need to correct my understanding about audits.
1. Audits is required if annual turnover is less than 2 crore and the profile is also less than 6%.
2. If the profit is more than 8% of the 2 crore turnover, in that case audit is not required and hence no need to maintian any books
For point 1, if I have to get away with the audits, book keeping etc I can file ITR4S, is that correct? By doing this I can simply add the profit to my salary and pay the tax as per my tax slab.
Point 2 : If the profit is more than 6%, in that case I don’t need any books and I can add this profit to my salary income and pay the tax as per my tax slab, is this understanding correct? Also what ITR form should I use in this case?
The major pain here everyone has is maintaing books and having them audited. I tried to support the petition but is seems to be closed. As per my understanding, govenment needs audit to believe that you actually have made profts less than 6% and hence they want to see your books 😛
1. Yes
2. Profit more than 6% from this FY. Yes
Point 1: yeah. But you will be letting go of losses this way. Best to carry them forward by declaring using ITR3, so you can setoff against future gains.
Point 2: Yes, ITR3.
The reason for audit in case of profit less than 6% is because it doesn’t seem like a norm in regular business. Govt wants to ensure that people aren’t declaring losses to avoid taxes. But yeah, when applied to trading, it goes wrong. 🙂
Thanks Nithin for wonderful article.
My question is for this AY:
Q1. It there any upper limit for turnover, where it becomes candidate for audit, where I take delivery and pay STT and hold for 1-364 days. Or audit is required only for F&O.
Another Case
1. No Salary or other professional income
2. Intraday Buy 5,82,102 and sell at 5,90,862. Profit 8,759
3. STCG Buy 24L – Sell 25L : profit 1L
Q2. Can one still continue filing ITR2 as did earlier while had salary income and show 8759 as business income OR in any OTHER head and pay as per tax slab.
Q3. or is it compulsory to for another ITR, when no salary income and have STCG with 8k as intraday benefit.
1. This is a grey area. There is no upper limit on turnover. But if you are doing this equity delivery as primary business, then best to show it as business income and get audited if turnover more than 2 crores. Do go through all the chapters.
2. Since you have intraday which is a business income. You can’t show this on ITR2, you need to use ITR3.
Thanks Nithin.
One last question, if profit is less than 6% and equity turnover is less than 1cr. Do I need to get audit ? what to do for earlier filed returns then?
above one is for delivery based stocks and NO FNO and intraday
For equity delivery, there is no concept of turnvoer and all. It is only for business income (intraday/F&O) and not capital gains.
Dear Nithin sir
i am a happy Zerodha user my income detail for period 01.04.2017-31.03.2018
salary income—> 730000/- (approx)
profit ————->470/- in commodity section (Trade wise turnover 490/- )
kindly suggest ITR form for my case
Thanks in advance
What is the need of audit when everything in detail is there in Q
hi nithin
for example i am having 10 lakh rupees and brought 100 rupee shares then i will get 10000 (ten thousand shares ) and sold them for only 101 and the profit i will get is only 10000 , if i do this for 20 times the turnover reaches 2 crore the profit is 2 lakhs only , its very simple and profit and loss chart is there in Q, why should i go for tax audit. please helpme
Can you go through all chapters of this module. Turnover is not trading turnover, but gross sum of your P&L. Also audit requirement is set by IT department. Make sure to read all chapters to firstly see if you need an audit or not.
Thank you… My matter is not related to this although please reply
when will account maintenance charges are charged…
suppose if I open today… will it be charged after 1 year or charged with starting of the financial year?
Both for demat and trading account
I want to start with a small investment of 5000 or 10000… I heard that taxes are more
Kindly reply me
Suppose if I end up in a loss in equity and swing trading… What are the taxes, charges that are levied on me? (including demat charges)
kindly reply me, sir
than you
sorry it’s not equity its Intraday trading and swing trading sir
sir I have a small turnover of Rs. 24861in intraday and loss of Rs. 7940 , Rs. 6885 turnover in futures with loss of Rs. 4500 and capital gains of Rs. 2000.My total income from salary is 4 lakhs before deductions.Plz help whether I require audit or not and which form should I use.
Since you have small loss, you can maybe just declare 6% of your turnover as profit, pay tax, and avoid an audit. Otherwise, yeah, you will need an audit.
for ITR 4 sugam , if my revenue is more than 8 percent say 25 percent of turnover 50 L . then can I fill this form .
It seems this form saving my tax . Am I correct please correct it.
The idea is to not use this as a way to avoid tax. This form is meant to ease filing of taxes for small businesses. If you take this route to avoid tax, it potentially can come back with taxes and penalty.
Thanks sir I got it
Sir, i want to file ITR 4 this year but can i switch to ITR3 next financial year is it possible . This is my first time of filing income tax.
Yeah, technically you can. But best not to follow the practice of switching between ITRs.
Hi Zerodha,
i incurred loss in speculating trading in feb 2016 but i did not file income tax return .
so , if i fill it before 31st 2018 , will i get set off in this FY.
kay kay
No, if you file your ITR past due date (sep 2017 in your case), you cannot carry forward.
sir
I did interaday trading only for 9 days in January 2018 and got profit of 5000rs and turnover 25000.
1.can I file itr4s.
I m a salary person and not want to do interaday and will start only investment in short term and long term after 31st march…
1. It is called ITR4 now. Speculative business income can’t be shown on ITR4.
2. Yes you can file ITR4 this year and then shift to ITR2 next year.
if I fill itr 4s this year than can I fill itr 2 for capital gain next year
sir
i am trader . i have trading loss of 60000. But I dont want to carry forward those losses and i dont want audit . I dont have any other income . which itr form to use . can i use itr4 .
ITR3, if you dont’ have other income, you will not need audit, you will be able to carry forward as well.
can i fill itr4 instead of itr3 and show some presumtive gain in itr4. this looks more simpler than filling itr3 and i can avoid audit also .
Is my above argument is correct ?
Yes, you can. As long as by using ITR4 you don’t evade any taxes.
First of i appreciate and thanks for your efforts for educating and guiding people through zerodha varsity.
I am salaried and do trading time to time. I incurred loss maxm time and gain very less. My turnover is less than 2cr.
1. Which itr form i need to fill?
2.How to show profit and loss while filling?
3. Am i need contact notes etc or any other documents?
4. Is there any report zerodha generates at the end of financial year, which will help to filing ITR?
I incurred loss but i want to file because if coming financial year if i gain i can adjust with the same.
Kindly clear my doubt. I shall be grateful to you.
Thanks
Gautam, all your answers are here https://zerodha.com/varsity/module/markets-and-taxation/
Hi,
I am declaring intra-day trading as speculative business income and STCG as capital gain, can I know how to make balance sheet of speculative business.
lets say I have total ledger balance in starting of year 15,00,000 and I have made 251000 profit from intraday trading and 5,00,000 STCG, end of year I am holding stock worth of 18,00,000 .
and my bank balance is zero.
could you please guide me?
Thanks
Leeladhar
Ah, this will be tough to explain here. Maybe you can just google for making balance sheet.
Hello Nitin Sir, i have small doubt i have earned 1lac rupees as a salary before two years ,which i haven’t used till date,last year i have joined a organization and my annual income is less than 2.5 lac ,will this 1 lac will be included for this year for taxation ,or it is excluded.
Regards,
Aakash.
Hi Nitin – Thanks for all the information. Can you please advise from legal / taxation standpoint there will be no issue if, I use my mother’s Zerodha account for trading in F&O to reduce my tax burden. The funds obviously will be moved from my account to my mother’s account and vice-versa.
Yep, no issues.
Hi Nithin
I made an approx profit of 1.5 lakhs in derivarives trading in FY 2015-16 and FY 2016-17.
This was my only income. So i decided not to file ITR.
Now i am getting msg from income tax dept to file my returns..
Shall i file my returns and if yes which form shall i use.
Thanks
Yes, you can file your returns, use ITR3.
Hi Nithin,
Thanks for this wonderful information. I have gone through all the chapters and it is really helpful. Really appreciate your time and effort.
I started intraday trading in this fin year (2017-18) and ended up making a small loss. My turnover, as explained by you, is around 25000 (profit of 9500 and loss of 15500 approx). I don’t want to carry forward this loss. So I am planning to use ITR-4 and declare Rs1500 (6% of 25000) as my profit and pay tax of Rs300 (am in 20% slab, only salary).
Are the calculations correct?
Thanks in advance
Easwaran
Yep, correct.
Hello sir, great knowledge sharing indeed.
My details are as below..
Gross salary income- 4.5 lpa
Turnover
My FNO TO is 25 lakh
Trading TO (INTRA+ STC)= 6 LAKH
PNL
My FNO profit is 65000(which is less than 6%)
Trading loss (STCG+INTRA) is 130000
My 80 C investment is 1.5 lakh
Now my question is
1=Is there any need of audit?
2=which ITR form is suitable for me ?
3= is there any need to pay taxes, as I have not deducted my expenses(broker age stt stamp internet charge etc. = 60000)?
Last que is – if a trader do a single trade in a year, his turnover is less than 2crore, he made a loss, will he go for audit as his Profit is less than 6%?
Thanks
1. Yeah u will
2. ITR3
3. Yeah, u will need to pay taxes on the F&O profit but after reducing all costs.
4. Yeah, unfortunately if going by the rule. Also make sure to check the chapter on turnover.
FNO trading is at profit of 60000 and other intra + short term trading is at loss of 150000.
While filling return all trading ( FNO+intra+ short term) will be treated as a single business income/loss. Correct me if I am wrong , then why I will pay tax on FNO gain if my overall business is at loss?
In ITR3 all these income, if positive , will be clubbed with salary income and losses will be carried forward . So the question is
My business will be taxed as per current income bracket and I can avail all deduction of 80c etc for decreasing my tax liability?
F&O and short term can be shown as non-speculative business income. So they can net off. Intraday is speculative business income, so has to be shown separately. Yes you can avail deduction under 80C. Do go through all chapters.
Hi Nithin
I am Intraday Trader in Equity and also trade in Equity Stock Options
My Net Salary Income is Rs 3,34,000/-
Intraday Turnover is Rs. 1,35,600/- & Profit is Rs. 245/-
Option Turnover is Rs. 81000/- & Loss is Rs. 19000/-
I want to avoid the Audit and keeping of records i.e. B/S and P/L etc.
1. Can I declare 6% Profit and Fill ITR4?
2. Instead, show 6% Profit under the head INCOME FROM BUSINESS AND PROFESSION & fill ITR3?
3. If I use ITR3 and show 6% Profit, Should I Fill up Part A -BS and Profit & Loss sheet of ITR3.
4. Can I C/F the Loss, if I fill ITR3? (Without Audit)
Please advise.
With Best Regards.
Raju Shinde
1. Yes
2. Yes, you can do this as well.
3. Not required. Fill only gross sales, GP, Sundry debtors and creditors.
4. If your total income is less than 2.5lks no need of audit, you can carry forward. But if your total income is over and you are paying taxes, you will need audit to carry forward.
Thank you very much, sir.
hi kartik, i recently moved frm bangalore to chidambaram..but since stamp duty in karnataka is different from that in TN i wanted to update my address details in zerodha Q..upon enquiring wit the support desk i was told that some address proof of chidambaram is reqd. but all my documents are of bangalore address and so i plan to get a driving license. do you suggest that i wait till my address is updated on zerodha records to resume trading so that correct stamp duty charges can be applied or is it fine if i continue trading now also?
you can continue trading.
Hello,
Sir which state charges (STT, stamp etc) the lowest when it comes to trading, i.e. in which Indian state it is most profitable to do trading in?
Thanks
Check this https://zerodha.com/brokerage-calculator#stamp_duty_view
Hi Nitin, My FnO profit for this year shall be around 16 lacs with a turnover (as per your site) of 75 lacs. Shall I go for 6% presumptive income which will lower my tax incidence.
Else I would like to consider my wife as 50% partner who manages the positions actively from home considering that I am job-holder with salary income.
First one will bring down taxes to less than half than what is in the first option. Please suggest.
Best not to take the presumptive route to avoid taxes. Second option is okay.
Hi Nithin,
I am doing F&O Trading and here are my calculation.
F&O Turnover : 380240/-
CDS Turnover : 22437/-
F&O Profit : 19205/-
CDS Profit : 4487/-
This profit together coming just less than 6%. i.e 468/- shorter for 6%.
What is your suggestion
Since it is less than 6%, it require Auditing and Auditior fee is almost equal to my profit (Auditor is aking 20K ). Can I use ITR 3 and increase my profit as 468/- and file the returns. I can save Auditor fee and also I can claim other expenses like Brokerage and Broadband fee etc. Is there any Pro’s and Con’s
Just for shortage of 468/- I dont want to pay Auditing Fee or loosing rebate of other expenses.
What is your view.
Regards
Shankar
Yeah, you can show more profit. No issues with that. You have to use ITR 3 and yes you can take benefit of all expenses.
I am salaried person. I have Intraday Trading losses of 60000 with an annual turnover of 2.2 lakhs. Capital gains are also present. I am not interested to carry forward losses to next year and want to skip Tax Audit. Is it fine to file ITR 2 ? Will i have any troubles from IT Department in future ?
In ITR2, you can’t show business losses (intraday). You will need to use ITR3.
Hi Nithin,
I am a salaried employee ( 6 months in this financial year ). I have day Trading losses of 60000 with an annual turnover of 220000. Short term capital gains of 150000 are also present.
I am not interested to carry forward the losses and my Primary objective is to avoid tax audit. Here i seek advise from you. I feel, I have following options.
1. Use ITR 2, Report STCG and Salary income, Ignore day trading losses. ( Please remember i am not interested to carry them forward, I just want to avoid tax audit )
2. Use ITR 4, Report STCG under the head of ‘income from other sources’ and Pay taxes on 6% of my business turnover of 220000.
3. Use ITR 3, Report STCG and Salary under appropriate schedule. Though i have incurred loss from day trading ( Business ), I report profit of more than 6% of my annual turnover ( In this way i can avoid tax audit ) and pay required taxes. ( 6 % of 220000 = 13200, 20% ( Tax Slab ) of 13200 = 2640 which is gold when i compare it with Tax Audit hassles. )
4. Club the turnover and net profit from ‘Day trading’ and ‘Short term equity investment’, Declare myself as a businessman ( I feel i can do that as i have worked only 6 months this FY ) and Take presumptive business income route by using ITR 4.
Please advice me on what path to follow in order to avoid ‘wrath of IT Department’ as well as ‘Tax Audit’.
Any other suggestions except above are most welcome.
Please know that I would be employed the complete FY 2018-19 and I really want to separate Capital Gains ( Tax Benefits ) and my Business Income ( FnO + Intraday ). In that case I should not be thinking of approach 4. Right ?
Point 3. Use ITR 3. Show STCG, show 6% of 2.2lks as profits and pay taxes as per the slab you are on (to avoid audit). Yep, ITR4 can’t be used if you want to show them separate.
Nithin,
Thank You for your suggestions.
I have few other questions :
1. If I file my business income ( Day trading ) under section 44AD and STCG under ‘Schedule CG’ simultaneously using ITR 3, Does that mean i have to file my business income ( Intraday + FnO ) at least for next 5 years under this section only ?
2. What if i stop trading and Shift to ITR 2 next FY. Will i be debarred from using 44AD when just in case i incur minor business losses in future or Ban is applicable only when you keep filing your business income using ITR 3 but not under Section 44AD ?
Thanks.
This is how the section reads
The Plain reading of the above lines is if a person uses provision of Sec 44AD ie 6% of turnover as profit and subsequently not uses this section then , he wont be able to use this section for five years.
If you stop trading then its not required filed under this section.
Dear Nithin,
I am a Agriculturist having a annual income of around 2,00,000 also getting Rs.84,000/ year Rent from a Property. My question is If I start trading in intra day and short term Delivery based like BTST means Do I have to file returns as a Business and should file ITR3 in future? (that is compulsory tax audit)
I mean even if My trading Profits didnt cross 2.5 lac? or less than 1.5 lac ( 1.5lac + 84,000 rent )
Yeah, you will need to use ITR3 to show your other income (outside agriculture). Yes, audit will be needed if profits less than 6% of turnover or if turnover more than 2 crores. If total income less than 2.5lks, then no audit.
Hi Nithin
I am a salaried employee with annual salary of 3.5 lks . I have loss in intraday trading along with profit in short term trading which is less than 8% of my shot term turnover, which ITR form should I file?
Sir, I am a salaried person having very small turnover and intraday losses as well as futures.I have profit from delivery based shares. My question is
i) Do i need to include the delivery sales as gross reciepts along with intraday and futures and again seperately show them in capital gains section? or
ii) Do I include only intraday and futures as business and show the reciepts from sale of share as short term investment wihout including it in business?
1. No delivery trades only in capital gains section.
2. Yes. Btw, If you have also done a lot of delivery trades (like a business), then you can also show this as business income.
Sir,
What is the benefit of showing Delivery as business income vs. Delivery as STCG?
Thanks.
You can claim for all expenses
During AY 2017-18, I had filled ITR 3 after audit . I had shown and carried forward a trading loss of approx 6 lakhs in it.
Now during AY 2018-19(FY 2017-18),I have not done any form of trading .(or any other business)
So for AY 2018-19 ,i have income from only salary and interest.(NO business income/loss).
Hence , filling ITR 1 would be ok or not for AY 2018-19?
In that case, losses of AY 2017-18 will be carried forward or not?
Or to just carry forward prior losses ,i need to again fill form ITR 3 for ay 2018-19.
As i am likely to trade in coming fy ie 2018-19, i need to carry forward my earlier losses.
Kindly guide.
Regards
To carry forward loss, you will need to use ITR3.
Hello Nithin, I don’t think you have to continue to file file itr3 in all subsequent years to carried forward losses declared previously. itr form is selected each year based on the sources of income derived that year and has no bearing on whether a business income/loss has been derived in any previous year.
for example: i filed itr3 or 4 previous year and carried forward loss of around 2 lakhs. Now this will be carried forward for 8 years regardless of how i file this year. This year and next year I may just have salary and file ITR1. The following year however I may have business income and hence file ITR3 and at that time I can choose to the offset my previous carried forward losses albeit after a gap of 2 years. Isn’t that correct? Good to see all your dedication to help folks. Thanks
Ah my bad, you are right.
So, even if i do not fill ITR 3 for ay 2018-19, my earlier carry forward losses will be further carried forward ?
yeah
My wife has some derivatives loss in A Y (futures)2016-17. And she has some income in home tuition.she does not have have any receipt. Is it possible that that in ITR 4 I CAN SHOW HER TUITION FEE AS INCOME FROM OTHER SOURCES FOR 1.5 LAC AND DERIVATIVES AS BUSINESS AND SHOW IT UNDER 44AD (8%) TO AVOID AUDIT.. PLEASE GUIDE….
The above year may be read as F Y 2016-17 (AY 17-18)
Yep, you could.
If showing income from other sources it is to mention TDs sch 2..??
sir , If we have to report unrealized profit and loss of assessment year 2017-18 or only to report realized profit and loss , and if we don’t need to report unrealized profit and loss then what happen to this , if we have to report in next AY ?
Yes if unrealized, you can show it in next AY.
Sir there is realized loss in derivatives and I want to show it in ITR 4 as presumptive income under section 44AD..to show profit @ 8 % in stead of loss to avoid audit..As I have read somewhere in loss audit is compulsorily required.. is it possible to show profit and tuition income as income from other sources .
..if not please guide which itr to be filled and in which head where audit is not required..Bi do not want the loss to be carried forward
Yes you can show profit and get away from audit. The % number is 6 and not 8 now.
Hi,
Under what circumstances can you declare income from FnO under “Income from other sources” say in ITR 2 itself, instead of declaring it as presumptive income under ITR3 or ITR4?
F&O has to be shown as non-speculative business income. Not as income from other sources.
Hi Nitin,
Firstly, Thanks for the great work.
FY17-18, my income as below.
Salary – Nil
Equity MF redemption (more than 1 year holding) – Net positive
Equity MF redemption (less than 1 year holding) – Net positive
Equity share sell (more than 1 year holding) – Net positive
Equity share sell (less than 1 year holding) – Net positive
F&O trading – Net positive
My total income including all above for FY17-18 is around Rs 600,000
I have invested Rs 150,000 in ELSS, Rs 50,000 in NPS
Which ITR form i can file online ?
regards,
ZD4870
ITR 3
hello Nithin, I have been trading at zerodha and I have sold a stock (IDFC) in FY 2016-17 which I had bought towards the end of FY 2015-16. But in your tax p&L, I am not showing this stock in the equity p&l summary but I checked the trade book and it shows that I had sold 6000 of IDFC in FY 2016-17 and that they were bought in previous year. But all other stocks that I bought and sold in same year i.e. FY 2016-17 is showing up in the equity p&L summary. Is this a technical glitch in software? or stocks that are bought and sold accross different tax years will not be shown properly? If so, how do I calculate and report the loss/gain on this stock for FY 2016-17 tax filings?
2) and just in case I have to do this myself, then do you use LIFO or FIFO for calculation of cost basis in short term equity based delivery trading.
thanks a lot. – Jay
There could be an issue, best to create a ticket for this. We have to use FIFO for this.
hi sir,
I m a salaried govt employee and trading is not my business and i have invested some money in equity and intraday shares ,my profit is less than 8%,Is auditing reuired in this case by CA?
If you have done intraday, it has to. Do go through all the chapters here.
Hi Nitin,
I am a housewife and my only income is from trading and i am using zerodha for last 7 to 8 months.My profit for the year is 60000 near about.I just want to know all the brokerage which is deducted including STT then GST and many more if I file a return do i get back anything(which is being deducted as brokerage by zerodha)since my income is less than 2.5.
You don’t get back anything.
hi nithin,
My turnover is less than 1 Cr and I have a net loss, I do not have any other source of income, so I fall into the slab of 0 tax. Can I carry forward my losses? and do I need to get audited?
you can carry forward losses. No need of audit.
But as told in the chapters, since profit is less than 6%, audit will be required
If your total income is less than 2.5lks, you don’t need an audit.
If we dont want to carry forward the loss so i can ignore it?
No, best to file the losses.
Dear Nitin Sir,
As per news report on cnbc the new ITR-3 AY 18-19 individuals in any business have to mandatorily give GST NO Can you inform regarding this as intraday traders do not have one
Nothing like that , In the earlier forms also there were details on various registrations that need to be filled. That was not in the ITR , but in 3 CD report submitted by Auditors.
GST isn’t mandatory.
God evening sir
is it compulsory to file itr.
if there is a only speculative income less than 250000
and no more income.
and turnover is less than one crore
Not compulsory, but advisable. There are chances of getting IT notice, if you haven’t filed after trading (similar to how u will get if lot of transactions on your bank account and u don’t file ITR).
Hello Sir,
I have started trading last year. I have done intraday, option trading and short term equity trading. I need to know which ITR form do I need to use for AY 2018 – 19.
In income tax government portal there is only ITR 1 is available. Please guide me.
ITR3, it will available in the next few weeks.
Hello Nithin, I have little confusion about ITR-3 and ITR-4
I am full time trader
I have taxable income just only from F&O so i file my advance tax as business income
Which form will i have to file between ITR-3 and ITR-4 ?? which one is more suitable for me?
Please suggest…
ITR3
and i have more than 8% profit than turnover.. so do i need to maintain accounts books or i can directly declare my business income?
because i dont want to give money to accountant unnecessarily..
please suggest
No need of audit.
Dear sir ,
I have income from job = 300000/- per annum.
F&O profit = 103000/-
What’s are my calculations?
Which forms I need to fill?
Thanks
5% above Rs 2.5lks as tax. ITR3
Only ITR3 or along with ITR1?
Only one ITR, ITR3
Hi Nitin,
I m Salaried in 3rd slab in Income Tax.
My Intraday – Equity Trades are net Negative. (49k + Charges 35k)
If i show 6% Profit in ITR 4, i cannot carry forward my loss to next years.!
If i want to avoid Audit, what is the way out and which ITR i have to fill. ?
warm Regards
DZ0099
If you want to carry forward the loss, you will need audit in your case. ITR3
Hi Nitin,
Fo STCG or LTCG, Do I need to show all my trades separately in ITR-2 / ITR-3
or Can I club the capital gains/losses and show it as a single amount ?
Thanks
Rajiv
ITR 3, you need to show business, LTCG and STCG separately.
for f.y. 2017-2018 (a.y. 2018-2019 speculative business like intraday traders cannot file ITR-4 – presumptive business 44AD – even if they have turnover below threshold.
can some one verify that please.
Yes, you are right
FY 2017-18(AY 2018-19) I have traded only in F&O NON speculative business can I file ITR-4 Presumptive business 44AD and also tell me as trader we not req GST reg. but ITR4 has GST Reg no and turnover column.
Yeah you can use ITR4. NO need of GST
Thank You Sir,
One more ques as Nature of Business code and name change in new ITR4, as I am a trader what should I select plz suggest me.
My total turnover is 2 laths in F & O (commodity) trading and I am really confused about the nature of business I should use . I am opting for PRESUMPTIVE SCHEME but whenever I am choosing “Financial Intermediation” , “investment activities” cleartax dismissing it as illegal combination. PLEASE PLEASE HELP ME. I FEAR IF I CHOOSE WRONG CODE THEY MIGHT CHASE ME FOR NOT HAVING GST.
Maybe best to speak to them and clarify on this.
thanks Sir for all this information
i m F&O trader
just two question for confirmation
(1) in ITR 3, i can put value 0 in sundry debitor, creditors and stock in trade, Right???
(2) and in amount of cash balance, saving acc balance + trading acc balance, thats ok but do i consider amount of Fix deposit in saving account as well or only saving account amount??
if i have cash of 1 lakh in saving acc and FD of 2 lakh… so which amount i have to declare in cash balance. 1 or 3??
First of all you are a pure F&O trader then you can use ITR3 and also choose Presumptive business.
For (1) In ITR3 just leave sundry debitor, creditors and stock in trade column its automatically get 0 or null not any problem.
(2) Remember FD is an Investment not cash so only amt in Saving’s A/c will be consider as cash at bank.
And during the financial Y2017-18 If you get credit any interest then show in Income from other source.
Hope it will help you…..
i know about saving acc interest show in Income from other source.
what about FD interest because TDS is deduct from it. do i have to show FD interest also?
Bro I have told you for that both FD & savings interest show income from other source and put TDS deduction as per 26AS you will get refund if income is non taxable slab
Ok i get it. Thank you… actually i confuse about 26as and TDS.
i have taxable income and my total FD interest it 18360 and total tds deducted 1836.
so i confuse about that i have to pay (tax+tds) over my FD ineterst or just have to after pay tax will i get TDS refund?
Hi Mam,
Can you please let me know the business code you are using while describing the ‘Nature of Business’ ( Intraday / FnO Trading in our case ) .
Thanks
Trading – Others (Code: 0204)
Sir,
In New ITR forms Nature of Business code change with name
In new ITR 3, the codes for nature of business are changed and there is no entry for Trading-Others (Code: 0204) in drop down menu.
yeah, little tricky. Maybe 13018
Hi Nithin,
I have a salary of around 7 lakh, and presumptive profession income (only freelancing, no F&O))of around 3 lakh this year. For last year i have filled ITR 4 and put my presumptive income in section 44ADA. For this year i started doing trading, i have done some options and intraday day trading as well as delivery one also. I have a loss of around 40-50k in options and intraday.
So for this year which ITR I have to fill?
Can i carry over my losses?
Did i need to audit?
Thanks in advance
Dear Mayank,
You need to file ITR-3,
as you mention intraday trading + some delivery.
NO audit req only keep proper book of A/c (P&L, Balance Sheet).
IN ITR-3, you can show salary + presumptive profession income + Business Income with loss carry Fwd.
Thanks sandeep for the clarification
But as I am showing loss in my buisness income (F&O and intraday, less than 6% of turnover) don’t i have to audit my account from ca as mentioned in these chapters.
Hi Mayank. Just wished to know as my situation is similar to yours that do we need to get the accounts audited?
Hello,
I do not have any salaried income (or by any other source) but only traded in Equity (with STCG net loss of -1.6Lac) + some bank FD interest
pls let me know, which for ITR to be filled and to carry forward this Short term loss do i need to have any kind of audit ?
Thanks in advance
Sharad
Hi Sharad,
You need to file ITR-4,
I assume your FD interest below 1 lakh
AS in your case loss of 1.6 lac, You R not required to Audit only keep proper book of A/c (P&L, Balance Sheet).
Hope this will help.
Sorry its ITR-3, as its change form 2017.
ITR2 if only equity delivery trades.
SIR,
I have short term capital gain of 14 thousand,
and loss in fno is around 1.5 lac and turnover less than 20 lacs.
my business income less than 2 lac,
but agriculture income is about 2.5 lac
so i should go for audit or not?
Since total income is below tax slabs, no need. But it is always best to get an audit.
What should be selected under ‘nature of business’ in the new ITR forms for AY 2018-2019.
I only trade intraday.
nature of business codes have changed this year and there appear to be nothing similar to the previois ‘Trading-Others (Code: 0204)’
Maybe this is the closest: Stock brokers, sub-brokers and related activities 13015
Nithin,
I think it is 09028-Retail sale of other products n.e.c. – which I think is closest to 0204-Trading others
Hi Nitin
I have salaried income rs 600000.
Intraday trading loss of 400000.
Which itr form and do I need audit.
ITR3
Hi nithin,
Can i fill show these both business income 44ada(50% profit professional) and 44ad (6% profit for f&o) in itr3 (As i have capital gains/loss also).
No, under ITR4
Hi,
Thanks for lot of information,
my short term capital gain is 1lac & turn over is 7 lacs
intraday loss is 5000 & turn over is 42000
i worked for a firm for 2 months as contract basis with income of 50000
so my total income is 1.5 lacs ,<2.5 lacs?
1. is it necessary to me to file ITR?
2. do i have to pay STCG tax for 1 lac?
3. if i have to file ITR which ITR form can i use?
4. am i auditable?
I will be very thankful to you if u please give me the clarifications
1. No
2. No
3. ITR2
4. No
The new ITR form 4 asks for GST Registration number. How can I give GST registration no. if I fill form ITR4 for my speculative intraday trading.
Narayan
GST field is not mandatory and if the same is not applicable to you , you can leave it blank.
Hi nithin
I don’t have any other source of income. I’m started trading in intraday in last 3 months. My turnover for 2017-18 is 4334 and i made a loss of (3097).
1) Is it compulsory to file income tax return since my income is below basic limit
2) is audit is compulsory
3) Will i get any notice for non filing of tax return
1. Not compulsory, but best to file.
2. Not in your case
3. Don’t know. best to file your ITR.
If I have to file the ITR, which form either ITR3 or 4s
ITR3
Hello Nitin,
I downloaded the latest form ITR3 and find that the codes for Nature of Business have changed. And there is nothing like Trading listed. In any case “0204 Trading Other” is not listed.
In fact I couldn’t discern as to which one should be selected. Could you please advice.
Thanx and bst rgds,
Praveen.
YES U R RIGHT THERE IS NOTHING THERE ABOUT TRADING.. AB KYA SELECT KARE???
You can try this Stock brokers, sub-brokers and related activities 13015
Yeah, the codes have changed this year. You can maybe use this Stock brokers, sub-brokers and related activities 13015
I am a new trader.I transferred 4 lac rupees from my savings account to demat and earned 1lac from trading.How much of the money is taxable .I am a self employed farmer.
Add:My income for this year is 1 lac rupees.
Hi,
Assuming you have already paid tax on 4lkhs.
You don’t have to pay any tax. Tax is to be paid when income is above 2.5lkhs. Your income is less. But do file an ITR (Income tax return) or you might receive a notice from the Income tax dept.
Welcome.
You have to pay taxes only if income over 2.5lks. Make sure to file ITR.
Hello Sir,
I am an individual. I invest in MF, do delivery trading ( Short + Long ), do intraday trading ( BTST + MIS). Thats it. No other source of income. Only, trading and investing is my source of $$.
Question- What is my nature of business (In ITR3) ??
A. Sector- PROFESSIONS
Sub-Sector-
Other professional services n.e.c.
B. Sector- FINANCIAL INTERMEDIATION SERVICES
Sub-Sector-
1. Mutual funds
2. Investment activities
3. Stock brokers, sub-brokers and related activities
4. Other financial intermediation services n.e.c.
C. Sector- WHOLESALE AND RETAIL TRADE
Sub-Sector-
Retail sale of other products n.e.c
(n.e.c. – not elsewhere classified)
There is no specific category for what I do, personally I don’t think I fall in any. Maybe, option C.
Thanks.
Maybe Stock brokers, sub-brokers and related activities 13015
Hi,
Sir even I thought of the same, initially, but the term ‘INTERMEDIATE’ in ‘FINANCIAL INTERMEDIATION SERVICES’ throws me off.
I think it fits Zerodha because Zerodha is in between the market and people ( i.e. intermediate), whereas I am a direct consumer (of sorts).
Intermediate sounds like the sector for people under banking and such sectors.
Sir does option C not fit?
C. Sector- WHOLESALE AND RETAIL TRADE
Sub-Sector-
Retail sale of other products n.e.c
(n.e.c. – not elsewhere classified)
Thanks
The issue with wholesale and retail trade is about GST. You would be required to have GST number and all. Let me get more info on this.
Thank you sir . Please do let me know of this.
Hi Sir,
Last year I filed ITR-2 as I was doing only delivery trades and showed them as Capital gains in addition to my salary income.
Will it be possible for me to do futures and options trading and file ITR-3 showing them as business income from next year?
Many thanks in advance for your support.
Yes, absolutely possible.
Hello Sir,
1. I just found a major problem with Q. I don’t see DP charges (correct me if I’m wrong) mentioned anywhere! Even if it is mentioned under someother heading it should atleast clearly state ‘DP charge’ in any report given by Zerodha. Should it not?
2. In Tax P&L, DP charges not mentioned with all other charges, does that mean that DP charges cannot be claimed?
3. Is there any report which mentions DP charges charged with the specific delivery stock sold on specific date? (What I want to know is suppose I sold 100 kotak delivery shares on Monday, where can I find all charges+DP charge for this particular sale?)
Thanks.
*2. In Tax P&L, DP charges not mentioned with all other charges, does that mean that DP charges cannot be claimed?
A. If Delivery stock shown as STCG or LTCG can DP charge be claimed as an expense?
B. If Delivery stock shown as business income can DP charge be claimed as an expense?
1. Go to the ledger and search by dates. You will see the DP charges there. DP charges in other credits/debits on P&L will show up soon.
2. DP charges, along with AMC etc can be claimed. Look at your ledger for all charges.
3. Ledger
Sir,
Please let me ask this question one last time to get clarity.
SEBI charges
Stamp duty
Service tax
STT
Turnover charges
Brokerage
AMC
DP Charges
1. Which one these cannot be claimed if business income?
2. Which one of these cannot be claimed if STCG or LTCG income?
Thanks.
1. All of them.
2. STT
Sir,
In my case there are no profits, suffered a small loss. Now in the ITR, in no accounts case, in profit & loss sheet. There is a field for gross recipient and gross profit, no field for loss.
Can I fill gross recipient as zero (since no profit) and fill in my loss in the gross profit which is a NEGATIVE figure. I do this since gross recipient don’t except negative values and I don’t see a gross sales blank.
I think I am in the right (?), but asking to make sure.
Thanks.
You need to file your turnover in gross receipts. But this value has to be positive. Under net profit, you can mention profit of over 6% of turnover. You can’t declare loss in no accounts case.
Sir,
I thought those who didn’t need an audit were to fill the no accounts case (lol, was definitely about to get screwed by my own hands, glad to ask this question). Since I want to show losses and carry forward them, I guess I need to fill the rest of the P&L form? (i.e. point 1 to point 52)
Yes
Hi Nikith,
I’ve been filing tax with ITR1 till 2016-17 as my source of income was just my salary and FD interest and I started investing/trading from 2017-18 with Zerodha.
My income in 2017-18 are
Salary : 1200000
Bank interest ( FD) : 20000
Short-term trades – profit 24,754.80 ; turnover 4,03,539.75
Intraday/ Speculation trades – profit : 1,357.70 ; Turnover 4,597.70 by 6 stocks – 6 transactions (buy/sell)
Since my intraday transaction not much frequent/heavy, can I consider profit (from intraday trading) as non-business income and put it under “other source of income ->Unexplained investments u/s 69” in ITR-2, instead of filling ITR3 with business income
hmm.. ideally no. 🙂
I have a request for the author. Details as follows:
1) The tax rules have been changes from the FY 2018-19 for long term investors.
2) My query is that the above mentioned ITR filing is still valid for this financial year (2018-19) ? If not, you are requested to update the chapter as per the new ITR rules for traders/investors who are salaried employees, which will be a great help for new traders like me.
3) Another query is that I have done intra-day trading and do-not have any profit from it, in-fact I have incurred loss of around Rs.6000 approx, also I have inter-day trading (deliveries) from which I have a profit of around Rs.350 only. My overall profit is very much less compared to my salary amount. Which ITR should I file?
1/2. I have updated the new capital gain taxation from this year. The forms remain the same.
3. Ideally ITR3, but since you have just a few trades, maybe ITR2 (not the ideal thing to do). Do speak to your CA.
Title: Terror of the cashback.
Sir,
There are a no. of apps these days that offer you cashback on purchases, transactions etc. Now some apps like amazon, google only give you (1) app currency which you can use to buy things within the app only and then there are other apps like BHIM, Kotak that are offering (2) real money as cashback rewards directed to your bank account, these rewards could go upto a max of Rs 350+.
Question- Do I need to report (1&2 / 1 or 2) these in ITR? It would be a real nuisance to keep track of these!
Thanks.
You need to reduce the cash back from value of respective expenses/ capital asset purchased. If the cash back is towards personal expenses, reduce it there. Disclosing separately in ITR wont be required as these are not in the nature of Income , but promotion / discounts to spend more.
Duly noted.
Good luck.
Hello,
Sir a humble plea. Please turn ‘Q’ into an app. I don’t really trust mobile browsers and I’m sure it will be a hit amongst users.
Thanks.
dear nitin,
i am having no other source of income since last 4 years only bank FD interest and share trading including short term , long term ,speculative and F&O .
( F&O losses are 1.2 lacs ( f.y 2015-16) and 1.8 lacs ( f.y 2016-17)
1-last year my CA filed my returns in ITR 2 and reflected these losses in long terms ( 20%) column in CFL schedule.
is it correct ?
2- last year ( f.y. 2017-18) the profit /loss are as follows
a- LTCG-28000/-profit
b-STCG- 154000/- profit
c- F&O -55000/- loss
my questions are
1- which ITR should be used ?
2- can the earlier/current losses in F&O be setoff against current STCG ?
3- as i am doing trading full time from my house but dont maintain any accounts etc , can any expenses be claimed which i am not doing till date ( also neither suggested by my CA)
would appreciate your answer in detail.
thanks
1. No showing F&O under ITR2 is not correct.
1. ITR3
2. No
3. You can claim for the last FY while filing ITR. NOt possible for before that.
THANKS FOR THE PROMPT REPLY NITIN.
1-but regarding your reply in point no. 2 , i have read your module no 5.4 under taxation for traders where in you have explained that the current year losses in F&O can be set off against current year speculative gains.
requesting to pl clarify.
2- also since the turnover concept is not clear even after reading the module , pl guide how to calculate the same . is it the net profit /loss in the particular segment OR is it the addition of total buy +sell value?( i dont think CA is knowing these details otherwise he would have filed the correct ITR last year .
3- the earlier F&O losses filed incorrectly by my CA in ITR2 last year ? can i get the same corrected this year as the same can be carried over for 8 years ?
thanks in advance
Hi Nitin!
First of all congratulations of having a very good advisory for stock investors which helps them to clarify so many confusing things in the present income tax law.I have a query regarding the valid ITR form as per the details mentioned below and please advise me which ITR form will be applicable for the returns:
My income chargeable under head salaries is(a) 201319
EPF(b) 10250
So total Income from salaries (a-b) 191070
Other income(Interest on savings and FDs 98039
Intra-day / Speculative profit -1518.40
Intra-day / Speculative turnover 2280.90
Short-term profit -12784.40
Short-term turnover 810561.85
Futures realized profit -52633.60
Futures turnover 92288.40
So i incurred losses in all the three segments of short term equity,intraday equity and as well as F&O.If i file ITR4 then is there any column of shown capital loss against the short term equities or else can i file ITR 4 by showing lumsum profit @ 6% against the total sales turnover and again if i can file in this way then what is the way out to show the capital losses in the short term equities.Kindly advice.
Regards
Vivek Misra
ITR4 won’t be suitable, you will need to use ITR3. Show capital losses, declare 6% of your intraday and F&O turnover as profit and file your ITR. You can carry forward the capital losses. Do speak to a CA.
Thanks for the thoughtful reply Nithin.Kindly clarify
1 What code needs to be selected under nature of business
2 Do I need audit
Regards
Vivek
1. Code is a little tricky on this year ITR forms. I think the closest is : Financial intermediation services and either investment activities or stock/sub-brokers/related activities.
2. Not if you are showing 6% of your turnover as profit.
Would it not be better to put 13018 – Other financial intermediary services n.e.c.? Since FnO is neither investing nor a broking service?
Yeah, little tricky. So yeah, upto you. Both seem okay.
THANKS FOR THE PROMPT REPLY NITIN.
1-but regarding your reply in point no. 2 , i have read your module no 5.4 under taxation for traders where in you have explained that the current year losses in F&O can be set off against current year speculative gains.
again in another point as per you the 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.
requesting to pl clarify.
2- also since the turnover concept is not clear even after reading the module , pl guide how to calculate the same . is it the net profit /loss in the particular segment OR is it the addition of total buy +sell value?( i dont think CA is knowing these details otherwise he would have filed the correct ITR last year .
3- the earlier F&O losses filed incorrectly by my CA in ITR2 last year ? can i get the same corrected this year as the same can be carried over for 8 years ?
thanks in advance
¶
1. ah my bad. Yes – Speculative (Intraday equity) loss can’t be offset with non-speculative (F&O) gains, but speculative gains can be offset with non-speculative losses. And yes, non speculative losses can be set off against any income other than salary in same year.
2. Everything about turnover here: https://zerodha.com/varsity/chapter/turnover-balance-sheet-and-pl/
3. Ah no, you can get it corrected, but will not be able to carry forward now.
Sir,
I trade both in Derivative and equity market. Here are the details :
F& O turnover – Rs. 20 lakhs
F&O profit – Rs.9 lakhs
Short term capital gains – (Rs. 80000)-Loss
I paid an advance tax of Rs. 1 lakh in 26/03/2018 and self-assessment tax of Rs. 250000 on 06/04/2018.
Am I eligible to file ITR-4 by declaring Presumptive income 6% for current assessment year.
In continuation to the above, I do have a dividend income of R. 15000. I have no other income except trading. So, Can I go for ITR-4
Best not to declare 6% of turnover as profit to avoid paying tax on your 9lks income. Use ITR3 and file tax accordingly.
I am salaried person of income around Rs 4 lakh. i have investment in shares and mutual fund for time frame of 20 yrs. in financial yr 17-18 i made profit of Rs 8000 and loss of Rs 3000 in trading. what itr form should i use. where can i show all my investments for LTCG
ITR2 and under capital gains.
I am trading in fno. Name of buisness for ITR 4 form please?
If you are an individual, your name.
Hello Nithin Sir,
Please tell me which ITR Should I Fill. My Salary Income is Around 16.28LPA, Bank FD int=18000, Bank Saving acc interest is around 40000,and total turnover is 165000(Speculative + Short term )-with net STCG of Rs4045 and Intraday loss of 14471.
Also does it needs to be audited.
ITR3
1)what is gross receipt(no account case of itr3) in profit and loss account in case of futures and intraday?
2) I have a very small turnover (around Rs.10000) and loss in futures and intra day along with salary income.Can I use itr3 (section of no account case) and show 6% profit?
I am salaried person having taxable income of 1200000 P.A. . I have traded stocks and F&O in FY 2017-18 of around 1.5 lac(Purchase and Sell) and have capital loss of Rs. 5000. Which ITR form should I use?
ITR3
Hi,
In capital gain schedule of ITR-2,
Column F is asking about “Information about accrual/receipt of capital gain”
date given are upto 15/6 , 16/6 to 15/9 , 16/9 to 15/12 ,6/12 to 15/3 and 16/3 to 31/3
How we can divide capital gains we got in these time period. will we get any details from Q.
for eg if i made profit of rs 10.000 as STCG taxable @ 15%, how easily i can distribute it to the dates mentioned in Column F of Capital gain schedule in ITR-2
Ah that quarterly is currently not available. You need to do this manually.
Hi,
I am PSU employee,I need some help for the below query–
I have income from salary, Fixed deposit interest income, short term capital loss and intraday traing loss. My intraday trading turnover is 3013.90 rupees only but i have losses of 709.70 rupees. My short term trading turnover is 4685 rupeed but losses 89.30 rupees. Since my profit( actually loss) is less than 8 percent of turnover, do I need to get my audit done or I can simply pay income tax assuming 8 percent profit of my turnover under presumptive income. Which ITR do I need to file for AY 2018-19. I am comfortable in filing return for salary and interest income but intraday trading and short term capital gain are confusing me. Please help once and i will do it on my own since next year and will be able to help others. Thanks in advance
No concept of turnover with capital gains/loss. On your intraday, yeah you can show 6% of turnover as profit.
I am salaried person having taxable income of 720000 P.A. . I have traded in intra days in FY 2017-18 Purchase and Sell and have capital loss of Rs. 309000. Which ITR form should I use?
ITR3
I have a salary of 16LPA with following trading details for the FY 2017-18:
INTRADAY GROSS PROFIT ₹-1,596.20
INTRADAY TURNOVER ₹3,755.80
SHORT TERM GROSS PROFIT ₹-16,924.59
SHORT TERM TURNOVER ₹3,15,384.80
I have not done any F&O trades.
1] Which ITR form should I use to file ITR?
2] Is audit required as I have incurred losses or shall I skip as the turnover is very less?
3] 6% of which trading activity (delivery trades or intraday trades) needs to be added as a profit income to avoid an audit?
1. ITR3 ideally, but you can look at an option of using ITR2 to show your intraday loss as short term loss itself since your turnover is so less. Do speak to a CA.
2. If ITR2, no need of audit.
3. 6% audit requirement is only on business income. Intraday is speculative business and F&O is non-speculative business income. Short term capital gain/loss doesn’t have any audit requirement as it is not considered as business income (unless you declare it).
Thank you so much!!!
This is very informative. Thank you!
The key difference between paying tax and filing itr is very well put here. Some more info I found here also – https://www.hrblock.in/blog/income-tax-payment-vs-income-tax-return-filing/. I used to think TDS deductions are the final step in filing taxes but this has celared my doubts.
Sir,
i am salaried person and pay taxes on salary, but i started trading in stocks ( fractions of total income, less than 10k), and looses some
amount, which ITR form i should file?
Depends on what you have traded. Do go through the chapter above.
Sir,
I trade intra day in equity,f&o etc what is business code for above in ITR -3
Retail sale of other products n.e.c 09028
Stock brokers, sub-brokers and related activities 13015
Other financial intermediation services n.e.c. 13018
Does using wrong code attract penalty problems
regards
No there isn’t any penalty problems.
Hi Nithin,
Very valuable continued info are being provided at your end on the Tax issues, i have gone through the chapters with my tiny knowledge on taxation. Though i had several doubts related to my trading which are mostly have been covered in these Q&A replied by you.
As the ITR filing is coming by may we request you to guide us on the Tax filing (ITR3) by ourselves (Salary+Share Business Income+STCG+LTCG) where audit is not the case. If there is audit most CA only do the filing too.
The source samples in terms of Balance Sheet & P&L Statement etc to be also shown for better understanding on individual case.
Ps- I have gone through the samples ITR4 as provided, however the fresh samples for the AY18-19 with Tax Changes rules would be very useful to make us independently file the ITR.
Regards,
Ritesh
Hi Nitin,
Thanks again for this forum.
I am an NRI and have 2 queries for the ITR filing.
1. Do we need to declare the PIS account in the list of Accounts held in India?
2. my wife is also an NRI who has only income from house rent in India but as she has taken loan due to the loan EMI interest she gets loss from house property which was -151,249 which she had shown last year in ITR1.
she got intimation 143(1) as below
HEADS OF INCOME-
Income from house property
as provided by tax payer ———– (-151,249)
as computed under 143(1) ——— (-1,51,249)
Income from other sources
as provided by tax payer ———– (521)
as computed under 143(1) ——— (521)
GROSS TOTAL INCOME
as provided by tax payer ———– (-1,50,728)
as computed under 143(1) ——— (0)
what do i take from this statement as they have acknowledged the loss of income -151,249 under house property but under gross total income it shows zero against the loss of 1,50,728.
This year she will be filing ITR2 as from AY2018-19 NRIs can not file ITR1.
She wants to carry forward this loss from last year. can she do it ?
Please clarify after looking at the above statement.
as I am confused as it shows zero income as per 143(1) instead of 150728.
Thanks again for all your guidance.
Peeyush
1. Yes, also all your foreign accounts.
2. Yes you can carry forward. Carried forward loss will be mentioned in the carried forward section.
Hi Nithin,
I’m salaried person with below P&L:
Intraday Profit: 360
Intraday Turnover: 900
Short Term Profit: 5000
Short Term Turnover: 2.5 Lakh
Which ITR form I have to fill, since Intraday turnover is too small.
Also there is no F&O trade.
You can maybe just use ITR2 and show intraday as short term itself. Do speak to your CA.
1. Please advice me.
2. Trading activities Loss for FY 2017-18
Short term equity and intraday trading -3432 plus charges 5834 = 9265 (Loss) Turnover 7,47,185
Currency Profit 10518 charges 6518 = 4000 (Profit) Turnover 10,518
FO Loss – 4001 plus charges 14185 = 18187 9 (Loss) turnover 2,32,617
commodity loss -3.93.574 plus charges 2,28,416 = 6,21,990 (loss) turnover 17,81,625
other taxable income 12000 bank interest,
Kindly advice me which IT form to be filled , is any auditing required? and how to show the losses for carrying forward.
Thanking you
ITR3. Yes best to get audit done and carry forward losses.
Hi Nithin,
I have got some doubts related to my tradings & investment, could you please share your thought & guide me accordingly.
A) Intraday Turnover Rs.56,000/- Profit before brokerage, STT is Rs. 2,000/-
B) If i consider mine Delivery Trade as business income then Turnover is 20 Lakhs Rs. & profit before brokerage & STT is 36,000 Rs.
C) Also i have made short term redemption from MFs for total sale value of 2 Lakhs & STCG is 21,000/-
D) Other income is only salary income under 10% slab.
Wrt above, my queries are-
1-How to derive that Delivery Trading to be declared as Business Income or STCG?
2-Can i show my MF redemption under business income?
3- Can i show my delivery trade under STCG?
4- As my profit is below 6% of Turnover, can i show 6-7% profit & avoid audit & CA fees?
I’ll appreciate your response at your convenience.
Thanks,
1. If this is the only thing you do for a living, show it as business, otherwise best to as capital gains as turnover isn’t much.
2. No
3. Yes
4. Yes, for intraday or speculative business income.
Hi Nithin,
I have the following for FY 2017-18:
Intraday trading loss -Rs 9,140
STCG from delivery trades – Rs 65,415
Interest from bank deposits – Rs. 202,415
I will be filing ITR 3 to reflect my intraday loss as a deemed profit from business u/s 44AD by computing 8% of the turnover value as deemed profit to avoid tax audit since my profit is less than 8% of turnover and will be reflecting my STCG as an investment activities under the CG tab.
As presumptive income u/s 44AD need to be filed in ITR form 4, will it be a correct approach to show the deemed business income figure u/s 44AD in ITR 3 in serial no. 4 and 36i of the BP tab?
Kindly assist.
You can fill ITR 3 where STCG can be taken under Capital Gain & Interest Income under Income from Other sources. On deemed Income to be declared under ITR 3 , there is provision to fill the data in Profit & Loss sheet Row Number 53 to declare profit .
Dear Sir,
Please help me…… i am an individual (housewife)….. and my account is with you…….i am not a salaried person……..i started trading from october 2017 and my capital from october 2017 to 31st march 2018 is around 30,000 and i made a loss of whole….then i added amount in my account……….still i am in loss….
previous year i filled ITR (INCOME TAX RETURN 2016-2017)….. now what should i do…… which form should i fill this year……tell me whether i will show it as my other income(trading) or it as my business (trading) …… if i show it to my business then should i fill the IT file like one business man does ???? or what should i do ????? i do only equity and f&o but no commodity……..
Please help me very soon because i have to submit the ITR (INCOME TAX RETURN 2017-2018) within 31st july……..
Sweta, If you can go through all the chapters, have explained everything in detail.
Dear Nithin sir,
I go through your pages but couldn’t get my problem solved…..that is why i asked you here…..please solve my issues in simple format………and the knowledge i want to know…….
Use ITR3, show it as business income.
made a profit of about 10,000 in intraday, 6 lakhs in short term and loss of 30000 in long term. how to show in ITR3. is it required to show loss of LTCG for AY18-19 ITR
Hello Mr. Kamanth,
Thank you for this very informative and valuable article. Need your help.
I am salaried having taxable income 3 lacs from salary. whereas in FY 17-18 I did only intraday having total loss of Rs. 4028/- (turnover profit +loss sum is only 7393) . I do not have any income other than this. Kindly advice which ITR i should file and do i need to get audit or what can be a better option.
ITR3, but since your turnover is so less, you can maybe also look at just using ITR2 (not the ideal approach). Do speak to a CA.
Hello Nithin,
I don’t have any other incomes except trading.
For the financial year 17-18, I have:
F&O loss = 107587
total F&O turnover = 1165789
Intra-day / Speculative profit = -23612.95
Intra-day / Speculative turnover = 58586.95
Short-term profit = 15280.35
Short-term turnover = 3319908.85
I fall under the category of turnover less than 2 crore and profit less than 6% of turnover, but i fall under the tax exemption limit since i don’t have any other income. My questions are:
1) Do I need to get audit.
2) Can I just fill the ITR 4 form since I don’t want to maintain any book of records. If I do so, can ITR 4 be used to mention speculative income?
3) Can I carry forward my losses using ITR 4.
4) Can I use ITR3 without maintaining the balance sheet, P&l statement or book of records.
Thank YOU.
Hello Nithin,
First of all kudos for the wonderful module. Kindly help me in answering my below query.
Basic Info:
Income from Salary = Rs.5.6 lpa
LTCG = Rs.8236/-
Loss from F&O[Intraday]= Rs. 4500/- Turnover=Rs.10500/-
1. Should I have to get audited?
2. If yes, can I use ITR4 to avoid the audit?
3. If I need not be audited, then which ITR should I be using?
4. Will it be a problem in not disclosing my capital gains and loss in fax filing? [As neither of them attracts tax]
Thank U.
Hi,
I have a question on sec 44AD. If I have a salary of 20 lakhs,income frm house property and LTCG can I use sec 44AD for my speculative day trading turnover which is about 20 K. Can ITR 3be used for this purpose
Hi Nithin,
First of all, I would thanks for your help and guidance.
I am salaried person with below P&L :
Intra-day / Speculative profit: 49973.60
Intra-day / Speculative turnover: 128240.30
Short-term profit: 23501.55
Short-term turnover: 759277.55
Total Charges: 9923.99
So Net profit is: ₹63,551.16 ( 49973.60 + 23501.55 – 9923.99)
I have some queries given below –
1. Which ITR form I have to fill ?? (If I am filling my self)
2. From which I deduct charges? From Intraday profit or Shor-term profit ? (as Intra-day tax is application according to slab but for shot-term 15% is applicaple)
3. When uploading Zeroda P&L Tax sheet to ClearTax, only Shor-term profit is getting listed there.
4. This year, some ITR are merged like –
# The existing ITR Forms ITR-2, ITR-2A and ITR-3 have been rationalized and a single ITR-2.
# ITR-4 and ITR-4S (Sugam) have been renumbered as ITR-3 and ITR-4 (Sugam) respectively.
Please update the correct ITR for in all your posts
My turnover is small <10lakh and have only f&o trades
Q backoffice taxP&L takes gross profits which is little above 6% of turnover and so no audit is required.
If I consider net profits (after subtracting charges) it is less than 6% of turnover but it is more than 3% of turnover and not the case of loss as mentioned in the article where ITR-4S(now ITR-4) is recommended to show 6% profits and avoid CA charges.
Could I use ITR-4S(presumtive section 44AD)and get rid of P&L work with 6% of turnover as taxable income?
thanks
Thanks for all the info here, I am going the ITR-4 route as opting for ITR-3 means can’t use ITR-4 for next 5 years…
suggestion: If someone compiles FAQ out of all the q&a here could be good time saver, 3-4 years of comments to go through
You can take the 6% route, but also maybe take an aggressive approach to reduce your turnover value.
thank you!
for the answer and more for the advice!
Sir,
I have trading losses from equity, f&o and little income from FD interest. Which ITR form to be used? Pls help
ITR3
Hello Nithin,
First of all kudos for the wonderful module. Kindly help me in answering my below query.
Basic Info:
Income from Salary = Rs.5.6 lpa
LTCG = Rs.8236/-
Loss from F&O[Intraday]= Rs. 4500/- Turnover=Rs.10500/-
1. Should I have to get audited?
2. If yes, can I use ITR4 to avoid the audit?
3. If I need not be audited, then which ITR should I be using?
4. Will it be a problem in not disclosing my capital gains and loss in Tax filing? [As neither of them attracts tax]
Thank U.
1. hmm.. technically yeah.
2. Better to use ITR3, show profits as 6% of turnover and pay taxes.
3. as explained above.
4. best to disclose everything.
I am a salaried employee, salary is 25Lac PA.
I have an Intraday loss of Rs 4700
Short term loss of Rs3700
Options profit of Rs10900
Do I require Audit?
Which ITR?
hmm.. technically yeah, but u can get away by showing 6% of turnover as profits. Do go through all chapters here.
If I dont want to carry forward intraday loss, Can I go ahead and pay taxes for FnO only without auditing? My FnO turnover is 32000 only
yeah, but do speak to a CA.
From this year onwards; ITR 4 have some columns in FINANCIAL PARTICULARS OF BUSINESS which are MANDATORY now… I leave them blank last year as these were not mandatory…..E15: SUNDRY CREDITORS E19: INVENTORIES E20: SUNDRY DEBTORS E22: CASH-IN-HAND…Kindly guide me regarding about these columns and please keep in mind that last year I filled 0 in all these columns
I believe you are filing under ‘no account case’. You can fill only cash-in-hand. Cash-in-hand = Zerodha ledger balance + balance in bank account. You should be able to file after putting this value.
Just one disclosure. I am one of Zerodha trader like you, not Zerodha employee.
In ITR-4 (PRESUMPTIVE INCOME); there is NO option of choosing NO ACCOUNT CASE and it is showing VALIDATION ERRORS while submitting ITR if I leave them blank…I am just waiting for the appropriate reply from NITHIN KAMATH
Respective Sir,
I am house with income less then 2 lack ,having turnover(future 48 k, intraday 37 k, shortterm 70 k) and total loss (future 35k, intraday 16 k, shortterm 1 k)
total loss about 52000
which ITR should i fill
any audit
please reply
ITR3, no need of audit as your total income isn’t taxable and turnover also quite less.
Hey Nithin
I have intraday loss of 78000 and my total income is less than 2.5 lakh so it is okay if don’t file any return or I have to file one..
Please guide..
Best to file your ITR even if no taxes to pay. Use ITR3.
i am a salaried employee and falls in the 3rd tax slab. for the FY2017-18 i have SHORT-TERM loss of Rs 576 (turn over 55400) and intraday loss of Rs 1600( turn over 2300) which ITR should I use to avoid audit . pls do reply
ITR 3 ideally. Buy you can maybe show this activity as short term capital losses and just use ITR2 and avoid audit.
Sir,
In last financial year (2017 -18) my salary income is approx. 18 Lakh and profit by share trading in cash about 25000/-.
which ITR I should file and in which column I have to show my Share Trading Income.
ITR2 and in capital gains.
Sir
I had loss of 34000 in intraday and turnover of 59000. do i need to file IT return? which form i have to file
ITR3 and always best to file ITR.
Hello Nithin,
I don’t have any other incomes except trading.
For the financial year 17-18, I have:
F&O loss = 107587
total F&O turnover = 1165789
Intra-day / Speculative profit = -23612.95
Intra-day / Speculative turnover = 58586.95
Short-term profit = 15280.35
Short-term turnover = 3319908.85
I fall under the category of turnover less than 2 crore and profit less than 6% of turnover, but i fall under the tax exemption limit since i don’t have any other income. My questions are:
1) Do I need to get audit.
2) Can I just fill the ITR 4 form since I don’t want to maintain any book of records. If I do so, can ITR 4 be used to mention speculative income?
3) Can I carry forward my losses using ITR 4.
4) Can I use ITR3 without maintaining the balance sheet, P&l statement or book of records.
Thank YOU.
1. Not needed, but recommended.
2. Yeah u can. But you have to show 6% of turnover as profit. doesn’t make sense.
3. No, you mandatorily have to show profits at 6% of turnover.
4. Yes, this is the best thing to do.
nithin sir, My gross salary is 5.08 lac pa.
I started trading from aug’2017.
for 2017-18 fy my
intraday loss 9370 (turnover 20283)
short term loss 206 (turnover 86834)
f&o loss 16000 (turnover 1.52 lac)
I used to file itr 1 before..now pls tell me if audit is necessary ,I don’t want to carry forward loss..
Can I file itr 2 ?
hmm.. Ideally ITR3 and show 6% of intraday turnover as profit. You can avoid audit. In ITR2, you can’t show intraday loss/turnover. Do speak to a CA once.
If I fill itr 3 and showed 6% of intraday turnover as profit…what about f&o trade…what to do with that then?? pls.
You have to do the same with F&O as well.
I am saying that ad I didn’t traded actively throughout the year ..only 26 times traded
hi sir,
i m PSU employee. net annual income of 7.5 lakh annual. filling income tax return for 2017-18 by ITR1. Opened DMAT account with Zerodha few days back .as i m new for trial i did intraday trading of approx 500 rupees and get profit of 1.5 rupees excluding taxes ( condsider it loss because taxes are more than profit). i also did delivery based trading of approx 4997 rupees who are in my stock not sell yet. also invested in mutual funds.
today someone told me and also in read some websites that govt employee cant do “frequently buying and selling” thats mean i cant trade. but i will continue with mutual funds investment.
sir this is my case i want to know which ITR Form i need to fill for 2018-19 (next year) beacuse i did trading???? Its confusing between by filling ITR1 or ITR2?? i really need help sir
thank you in advance sir
ITR2, if it is just a trial intraday trade you did, you can show it as under capital gains/losses.You will need to use ITR2 to show all mutual fund and other investment gains.
thank you sir.
it was not a big amount if i use ITR1 , do they will sent notice
Hi Nitin,
I am a salaried income of Rs 9.5 Lks and I have below trade proffit/loss statement:
Intraday profit Rs 1000 (turnover Rs 1000)
Short term losses Rs 15,000 (turnover 145,000)
Now, 1. Should I file ITR4, ITR3 or ITR2 to show losses?
2. Can Intraday profit be adjusted against Short term profit? Or tax has to be paid on intraday profit and losses can be showed in short term saperately ?
3. IPO selling on listing day is intraday trade or short term?
1. Ideally ITR3, but since intraday is so little maybe you can show it on ITR2 as capital gain/loss.
2. Ideally no, but in your case, maybe. Do speak to a CA.
3. Short term.
sir please give one detail video on how to fill capital gain section of form ITR 2
Sir ,you are a great man.i have account with zerodha.ZX3496
Please suggest a book to understand bond or debt market and its relation with stock market.
🙂 Can’t really think of anything in the Indian context. Guess you have to google and learn.
Sir,
I am a active trader with zerodha and having salary income, income from capital gain, income from dividend, income from interest and income from f&o trading.
I have filed ITR-4 for FY-15-16 and ITR-3 for FY-2016-17.
Now i am filing ITR-3 again for FY-2017-18, am i correct? or any other ITR i need to file?
Yes ITR3 is correct.
Thanks
sir,
1 )what is mean by tax audit,
2) what documents they will ask for this( excel statement downloaded from Zerodha Q office will be sufficient)
3) if we do it this year any issue in coming years if we stop trading.
4) approx expenditure for this if the volume is small
1. Get a CA to sign on your ITR
2. Yep.
3. no issues.
4. In the range of 5k to 10k.
Sir,
If I have only short term capital loss (Approx. Rs. 5000), is it enough for me to file ITR2 so that the loss incurred this financial year I can balance in next financial year profit?
Yes
i have salary income plus below share income.
no intraday
short term profit: Rs.1,021
short term turnover: Rs.52,971
no longterm
1. Which itr to use? I guess ITR2. Correct?
But in ITR2 there are so many tabs.
2. Guess I need to use CG tab alone, apart form standard ones like salary, TDS, etc. Correct??
3. So please guide on how to fill CG tab, as it has lot of sections, sub-sections.
1. ITR2
2. Yes
3. You will have to google this or take help of a CA. Supporting queries on how to fill is quite tough.
Sir, I am retired person and my wife is salaried employee. I have pension, interest, Lic commission and dividend income as well as short term capital gains and long term capital gains from equity shares and sale of mutual fund schemes. I also have few intraday trades- Sales 1022548 Purchase 1020461.2 Net Gain Rs.2086.8 Can you guide me as to the ITR form to be used?
ITR3.
Sir,
I have income from salary of Rs. 10lakhs.
Intraday turnover of Rs. 18k with a loss of Rs.14k
Short term turnover of Rs. 2lakhs with a profit of Rs. 598.70
Which ITR form should i fill?
Is audit required?
If required what is the profit required to be shown in order to avoid it? (profit is required to be calculated on intraday turnover + short term turnover or only on intraday turnover)
ITR3
You can maybe show 6% of intraday turnover as profit and avoid an audit. But if you want to show the loss and carry forward, you would need it.
Profit only on intraday turnover. Short term can be shown as capital gains.
Hello Nithin ,
It would be really helpful if you can explain in brief about reporting 6 % of Turnover as profit in ITR-3, although the losses in reality. How to go about filling ‘Schedule BP’ in this case ? Should we enter our profit in Column 36(i) ( Sec 44AD ) and get it automatically subtracted from column 4 of ‘Schedule BP’ ? Please help, It would be really helpful for those filing returns themselves.
Thank You.
First thing is that you need to fill the No Account case details – your Turnover & Gross margin @6% . The Numbers are auto populated in Schedule BP Number 1 and continues in other too. Now you can fill in Point Number 35 (i ) Section 44 AD heading the profit out of 44 AD from the total amount above. Which will take you to Computation in the Sheet TI .
Hi Nitin,
I am filing ITR3 because I’ve got speculative intraday income plus salary income. I do not require an audit because my profit and turnover are favourable to the requirement. I’ve got two questions here–
1. Will I have to pay taxes on Intraday profit based on tax slab? I am falling under 2nd slab so it would cost me 20% taxes, right?
2. Can I show my expenses such as phone bill, internet bill etc and claim tax benefits on those, keeping in mind, I only have intraday speculative income, not business any other business income?
Thanks in advance.
1. Yes
2. Yes, as long as you can show these expenses as related to your trading.
sir,
1. I understand that if profit is less than 6% audit is required ,it is applicable for intraday or STCG or together.
2. In case of reasonable transactions on intraday basis then ITR 3 is must -is it true
3.if only short term capital gain or loss then ITR 2 and audit is required if turnover is above 1 crore- am i correct
thanks in advance
1. Intraday. STCG is capital gains, no concept of turnover for that.
2. Yes
3. If only STCG or loss, no need of audit even if turnover over 1 crore.
Hi Nitin,
I have following details from Form-16 and Backoffice from kite. Please help.
Income from salary:
Taxable income from salary after deducting 80c etc : 1,124,620 Rs
The employer already deducted tax of Rs 154,383
Future and options:
Futures Gross Profit₹-1,17,550.00
Total Gross Profit₹-1,17,550.00
Futures Turnover₹1,37,850.00
Total Turnover₹1,37,850.00
Total Charges₹19,751.85
Equity
Intraday gross profit₹-5,555.40
Intraday turnover₹12,841.20
Short term gross profit₹32,286.90
Short term turnover₹13,13,540.65
Total Charges₹6,374.14
Questions:
1) Which form do I need to file.
2) I was filing only ITR1 before. Should I continue the same?
3) I have loss in F and O. Do I need tax audit to be done?
I am confused. Please help.
Thanks in advance.
Regards,
Rajesh
1. ITR3.
2. No
3. If your total income is over Rs 2.5lks, then yeah u will need audit. Otherwise no.
Hello Nithin,
I am new to this trading. I am a salaried person with 30% bracket.
For the financial year 17-18, I have:
INTRADAY GROSS LOSS ₹ -28,831
INTRADAY TURNOVER ₹1,00,143
SHORT TERM GROSS LOSS ₹-1,04,227
SHORT TERM TURNOVER ₹ 28,38,952
LONG TERM GROSS PROFIT N/A
LONG TERM TURNOVER N/A
TOTAL CHARGES ₹37,409.47
Hence, from above, I fall under the category of turnover less than 1 crore and profit less than 6% of turnover. Kindly advise if :
1) Do I need to get audit ?
2) Which Form do I need to fiil ?
3) Can I carry forward my losses, if yes by using which form ? In this case do I need to get Audit ?
Thank you
Sandeep
1. Yeah, ideally.
2. ITR3
3. Yes, once u file ITR, it automatically gets carried forward.
Thank you Nitin for quick response. Just few more clarifications please:
1. If I show 6% Profit in Intraday, do I still need audit ?
2. Will my short term losses be also carried forward if audited ?
Thank you so much.
Sandeep
1. No need of audit
2. as I said short term losses are capital losses and not business loss. So you can carry forward without audit as well. Do go through all the chapters.
Hi Nitin,
I am raj, and i am doing only equity trading both delivery and intraday and no other income. I did 3 crores rs transactions and booked 2lk loss.Do i need to file income tax return and from where i can get statement to file the return. Which type of ITr should i use for filing.Do i need to consult with any CA.Kindly help me.
ITR3, and turnover is not trading turnover. Go through all the chapters on this module please.
Hi Nitin,
I am housewife having account with Zerodha . I have following income.
Interest :120000, STCG: 35K, LTCG: 29K, FNO loss : -30K (turnover=2 lac),
My total income is less than 2.5 lac so I assume I can use any ITR4 OR ITR3 without audit.
Are you planning to release sample ITRs for 2017-18 same as you did for 2016.?
Yeah, you can do ITR3 without audit. Sample ITR’s is on our list of things to do. I will ask the team from taxiq to give us one.
If I consider my STCG as Capital gain alone (Rs.2113 for FY18), will the 6% Audit clause(44AD) apply. I believe this clause applies only if we consider trading as a business.
Will not apply.
Is it necessary to mention the amount of stt paid in equity and f and o seperately in itr 3 in profit and loss section in the row other rate tax including stt and ctt.Can I mention it in the net purchases column along with the negative settlements ? The net profit will be the same though in both cases.
It is always better mentioned separately.
Hi,
My Turnover details
Total(spec+non spec)= 3.9lk
loss spec =4.7k
loss non spec = 34k
which form i should use
I fall in 20% slab
thank you
ITR3
Dear Nithin,
My wife is salaried person in 30% bracket. She opened her a/c in zerodha in 2018 and had invested in couple of stocks for longer term during Feb 2018, which she is still holding currently. Kindly let us know which ITR she has to file please?
ITR2 if there are capital gains to show.
Hi,
I am salaried employ, after all deduction my income is around 4.1 lacs. Speculation intraday 1500 rs from turnover of 15,00,000. short term equity – loss of 8000. which ITR form should i use. speculative intraday equity income should come under business income or short term.
ITR3. Intraday under speculative business income.
Dear Nithin,
I have started trading since last year using Zerodha, which is pretty Good and Decent.
I am a salaried person with 30% bracket (< 25L).
Following is my income other than salary :
EQUITY :::
INTRADAY GROSS PROFIT ₹ 54K
INTRADAY TURNOVER ₹ 60K
SHORT TERM GROSS PROFIT ₹ 3K
SHORT TERM TURNOVER ₹ 52L
LONG TERM GROSS PROFIT N/A
LONG TERM TURNOVER N/A
TOTAL CHARGES ₹ 22K
COMMODITY :::
TOTAL GROSS LOSS ₹ -42K
TOTAL TURNOVER ₹ 2.3L
TOTAL CHARGES ₹ 71K
OTHER THINGS :::
Interest on FD ₹ 25K
Interest on Saving B/A ₹ 20K
RECEIVED DIVIDEND ₹ 60K
TOOK HOUSING LOAN LAST YEAR ₹ 24L
From above, please advice on the below things :
1) Do I need to get audit (As i am trading Equity & commodity ??
2) Which ITR Form do I need to file ??
3) What should i do losses from commodity trading ??
4) Is there any plan for Zerodha to provide one example of ITR for this financial year ??
5) I heard that Motilal or someother vendor is providing suggestions to pick best stocks or MF for this year … etc ,, is there any such feature ZERODHA is providing to their customers ??
Thank you
Murali
1. Best to get it.
2. ITR3
3. You can declare it and carry forward to next year
4. Help with filing ITR is extremely tough. Best to consult a CA or you can reach out to cleartax, they have a special deal for Zerodha customers.
5. We currently don’t offer any advisory.
Hi,
In Fy 17-18 apart from delivery trades on which i earned stcg/ltcg, i had made some f&o transactions the summary of which is as below:
FUTURES GROSS PROFIT₹2,18,550.00
OPTIONS GROSS PROFIT₹-27,708.75
TOTAL GROSS PROFIT₹1,90,841.25
FUTURES TURNOVER₹4,00,250.00
OPTIONS TURNOVER₹1,08,933.75
TOTAL TURNOVER₹5,09,183.75
TOTAL CHARGES₹3,731.92
From what i have understood as of now, i have to file ITR 3 since there is no provision for Capital Gains in ITR 4. Also no audit is required in my case. My query is can i file my itr balance sheet and P&L in “No Account Case” where books of accounts are not maintained?
Yes ITR 3 and yes.
Hi Nithin Sir
Thanks for your service
I am a beginner in stock trading I have incurred F & O loss around 55000 and my net salary income after all deduction is around 2,56,000
My question is
1. Is tax audit is required to carry for word my loss.
2. If not can I carry for word loss in ITR 3 by using option Non maintenance of books of account.
3.Or I need to maintain books of account to carry for word loss.
1. Yes
2. No
3. Yes
Hello sir,
I am a salaried person in a bank with gross income as 6.50 lakhs. I have incurred a loss in intraday share trading of Rs. 300000. can you guide me which ITR i have to file? and in which field i have enter this loss from share amount?
Thanks and Regards
Nihar
ITR3.
The Contents of the Module on Taxation (for equity traders and investors) and your lucid clarifications on the queries have helped me a lot. Thanks a lot for your patience and time.
The rationale (if any) in applying the 6% minimum profit cut off for audit etc. under presumptive taxation for retail equity traders is very hard to find. As your voice does carry lot more credibility with the FM, may I request you to kindly take up suitably with the authorities for revisiting this proviso. I trust many of my co-traders also endorse this request.
I have done this multiple times. Don’t think the active trading community is large enough today and is not really looked upon as something retail traders should be in, but hopefully some day.
Hi,
I am a salaried person comes under 30% tax slab. I got FD interest and I have incurred loss of Rs. 82,000 in F&O trading (with turnover of Rs. 3,00,000). I don’t maintain any balance sheets..
1. Do I have to file ITR3 ?
2. Can I file without audit ? if so, could you please share any sample excel sheet for it
3. Couldn’t find option to file ITR3 online (only option available is to upload xml file) in incometaxindiaefiling website.
1. Yeah
2. The only way is by declaring 6% of your turnover as profit.
3. Best to consult a CA for filing help.
sir,
is there any short cut to get the brokerage charges for STCG alone as the zerodha statements contains both intraday and STCG together. is there any provision to make quarterly report from the back office
thanks in advance
Ah in current P&L no. But the new P&L will have.
Dear Sir,
I am Private company salaried person having salary income 4.02 lac gross income. I do intraday trading, Cash & Carry Short Term gain/Loss.
1. Which ITR I should fill ?
2. Do Audit is required in Cash & Carry Trade?
3. Do Audit is Required in Intraday & F&O Trading ? if Yes then what is the Criteria ?
Please reply as soon as possible.
1. ITR3
2. No
3. yes, go through the module, I have explained.
Hi
my Salary income 6 L and Trading turnover 46000 and i have some less loss but i dont want to go for audit and will show some profit will pay tax so which ITR form needs to fill
My gross business turnover is around 35000 with profit above auditable range(around 3500).Mine is a new business and I don’t want to continue intraday further. Am I liable to maintain books of accounts under section 44aa .Plz help sir as I am confused abou this.
No need to get audit done.
Hi,
Very informative article.
I am a salaried person in the 30% bracket
I earned a speculative gain of 74444 from a total turnover of 1.26 Cr ( total Sales value of the day trading transaction). The profit comes to nearly 5.8% of the turnover. few clarifications :
1. Do i still need to audit my account
2. While filing ITR 3 for FY 17-18, what should be filled in Balance sheet if i identify as ‘No account case ” – since there is nodebtors, creditors etc in my case
3. Similarly in Profit and loss schedule do i fill Gross Receipts as 1.26 cr, Gross profit as 74.44K , expenses = 0 so that net profit is 74.4 K ?
Kindly guide
1. If you are showing 1.26 crore as turnover then yeah. But maybe you can take an aggressive approach to calculate turnover.
2/3. For tax filing bit, best to consult a CA.
Hi Nitin
My only income source from F&O trading and i was suffered with losses from 2017 to till date i wish to carry forward my losses so which ITR form i have preferred
ITR3
Sir, I hVe a
capital gain by short term delivery of shares = 179000
Loss in F&O = 201000
Loss in Intraday = 100000
Income from FD interest = 130000
What is my income in this case and is it taxable? And is audit required?
Loss in F&O and income from FD can be setoff. So you will have 70k from that and 1.79lks from STCG. So 2.49lks. No taxes. Audit is basis turnover, check all the modules.
Hello Sir,
I am a government salaried employ on block grant basis ,my income is around 1 lac.
Speculative intraday profit is of Rs. 1,50,000/- from a turnover of Rs. 1,56,000/-
Short term equity profit of Rs. 1,50,000/- and Long term profit is Rs. 45,000/- .
As per your narrations I should use ITR -3. But I have a query that can I use ITR-2 and show the intraday gain as other income and profits from short term and long term as capital gains as per provisions in Income Tax law ?
This is because being a government employee I will have to show salary as main source of Income and after regular posting(i.e by December-2018) my annual salary will also enhance to 5lakhs that too I will receive some arrears before this FY ending.
sir,
in the context of ITR 3 return filing I have the following doubts
1) Showing a profit of 6% for intraday even though real profit is less than that to avoid audit is accepted method as per the IT rules?
2) file filing intraday profit tax should be paid as per the individual tax slab but what about the tax percentage for STCG (Both in ITR 3)
3) Is there provision to carry forward both (intraday and STCG ) losses in ITR3
1. hmm.. It doesn’t say you can’t do this anywhere. Best to consult a CA
2. STCG if you are lesser than 10% tax slab, you pay as per the IT slab you are in. But maximum of 15%.
3. Yes
Hi Nitin
my Salary income 6 L and Trading turnover 46000 and i have some less loss but i dont want to go for audit and will show some profit will pay tax so which ITR form needs to fill
Dear Sir
i have salary income Rs.1,58,000/-, short term capital gain Rs.75,540/- and Speculative loss (sum of difference between Purchase and Sale .)Rs.65,390/-(share Intraday trading Turn over Sale Rs.1,86,49,669/- and Purchase Rs.1,87,15,058/- = Rs.-65,390(Loss)
which ITR i need to fail and is it need to be Tax audit. Please reply .
ITR3. You can avoid since overall income less than 2.5lks.
What code should be used “Nature of Business” for business income from trading in equity while filing ITR-3 for FY 2017-18? It used to be 204 – Trading(others).
Check this.
Hello Sir,
First of all, thank you, for all your help so far.
Sir, I am almost done with my ITR3 but I am uncertain about a few things.
1. Is it necessary to report Intraday turnover?
2. In one of the previous comments you had said that turnover is to be reported in Gross Recepients (schedule P&L). When I enter turnover value in Gross Recepients it reduced my losses i.e. (e.g.) My losses are 1500 after entering a turnover of 250 it reduces my loss to 1250 and in schedule CFL (in ITR3) it shows that I can only carry forward 1250. Where to report Intraday turnover?
Thanks a bunch.
1. Yeah
2. Best to speak to a CA for filling help.
Hello Mr. Nitin.
I am a salaried person 3.50L P.A. I am have at at zerodha. my short term porfit=21546. short term turnover=3,67,329/=
Please suggest which ITR I need to file.
Please suggent
ITR2.
ITR2
Hi Sir,
My salary is 8L. My profit and loss are as below:
INTRADAY GROSS PROFIT 29,524.07
INTRADAY TURNOVER 30,942.27
SHORT TERM GROSS PROFIT -31,983.65
SHORT TERM TURNOVER 12,93,415.80
LONG TERM GROSS PROFIT N/A
LONG TERM TURNOVER N/A
TOTAL CHARGES 5,403.09
Overall loss of 31983.65 – 29524.27=2459.38
So I have profit in intraday and loss in short term.
1. Which ITR do I need to fill ?
2. Will I have to pay 15% tax for intraday profit and none for short term loss or after adding both ?
Please guide.
1. ITR3
2. You have to add intraday profit to your other income and pay as per tax slab. Short term loss can’t be setoff against anything and you will have to carry the loss to next year.
Does it require audit as well?
No, since your intraday profits is >6% of turnover (intraday is speculative business income)
Hi,
I had invested and traded in stock equities and derivatives and incurred losses.
No net profit with turnover around 5L in derivatives, >18L in short term equity, >86K in intra-day (as per Zerodha).
Which ITR should I file?
What if I do not wish to carry forward the losses?
Thanks and regards,
Dr Datta Pawar
ITR3, best to declare the losses even if you don’t intend to carry forward.
Dear Sir,
After reading all ur Valuable Replies, it has become Crystal clear that for Intraday Profit/Loss a person has to file ITR 3.
In ITR-3 there is no problem in filling Part A-BS (Balance Sheet). That can be easily filled.
I am having problem with Part-P&L(Profit and Loss) at page No.4 of ITR-3.
in that Part-P&L section, there is ‘Other Income’ at S.No.2 and beneath
(vi) Profit on sale of Investment being securities chargeable to STT ….
Query 1. Whether here only Net Amount of Intraday Profit/Loss is to be disclosed. (I am not claiming any other expenses).
Query 2 All other columns like S.No.1 Revenue from Operations, S.No.3 Closing Stock etc. have to be left blank.
Please help …
Neeraj, best to take help from CA for ITR filling.
For ITR3, presumptive case under 44AD, Gross Profit (Schedule Profit & loss – item 53i(b)) is 6% of Gross Receipts (Turnover).
But can Zerodha brokerage +taxes be deduced from Turnover before calculating 6% profit?
Or this Expense is it not allowed to be deducted?
Under presumptive income, it is 6% post all expenses.
How the audit is done? Only a CA can do audit or anyone else can?
Yeah, only CA can audit.
Hi Sir,
My taxable salary is 373344/-.
deduction under chapter VI is 69260/-
Intraday gross profit is -36378.6/-
Intraday turnover is 67985.10/-
Short term profit is -2006/-
Short term turnover is 210186/-
Option profit is -88917/-
Option turnover is 281172/-
My query is:
1. Do i need to fill ITR-3.
2. How to carry forward my losses under speculative and non speculative loss??
3. Do i need auditing?
1. Yes
2. You have to file your ITR and show losses, it will automatically get carried forward.
3. Ideally, yes.
Dear Nithin,
I am salaried individual and I do pay tax and file return. I have started buying and selling shares recently. If I remember I did purchase shares of a company and sold it in less than 12 months. Every month I purchase some shres and sold some shares in less than 12 months .The loss amount was 1700.If i need to file this as well, how to do this? Do i need to submit a separate form? If yes then form number? Do I need to be audit?
Thanks regards,
Nag.
Hello Zerodha team – I am an existing client and die-hard-fan of Zerodha !!! I have a confusion regrading filing future / Option trading income under presumptive scheme. I was filing in the Cleartax portal using the code “Code: 13010 – Financial intermediation/Investment activities” but it gives me an error “this is an illegal combination with section 44AD”. Do you have any idea why this option is not valid with presumptive scheme? Any other nature business should be selected for trading ? Is “Retail sale of other products n.e.c” is a valid option ? Thanks for your help ..
Hmm.. best to get a CA do this for you.
Dear sir,
I’m salaried person. 30% tax bracket.
Is it absolutely necessary to file F&O,intraday equity, equity delivery less than a year losses as business income? Can we use form2? Is it necessary to use form 3?
Yeah, to be compliant ITR3. btw, equity delivery as capital gains.
Nithin sir, my profit from business was 328000 on a turnover of 1900000 my fno turnover was 680000 with a loss of 125000.my question is as per my understanding i can offset my fno loss with business profit and i want to file itr 3 and i dont need audit. Pls correct me if i am wrong.
Best to get an audit done I think because of your business turnover being more than 1crore. Speak to a CA.
Hi,
Do I need to file ITR using ITR 2 or ITR 1 would be sufficient if I have stocks and mutual fund units purchased during the financial year 2017-18, but not sold any of those units.
Thanks.
You can use ITR1
Hi sir,
i am trade in option trading. my question –
1 which itr 3 or 4 used
2 how to calculate turnover, when short put and squer off in intraday
3 my income govt employee 290000 PA and option trading loss is 16000. can i fill itr3 without audit and brokerage and other expense claim in which section in itr3.
plz solve my problem hurry
1. ITR3 ideally.
2. Have explained in turnover chapter.
3. You can add on your expense. Best to consult a CA for ITR filling help.
Hi Nithin,
I am salaried employee, earning an income of 6.15 LPA. I also have an educational loan ,interest portion deductible. Following are the details for 2017-18 year:
Intra-day / Speculative profit -33394.20
Intra-day / Speculative turnover 98692.80
Short-term profit -786.75
Short-term turnover 15387.00
Long-term profit 0.00
Long-term turnover 0.00
1. Which ITR do I need to file?
2. Does it need to be audited by a CA, or can I show a 6% on Turnover, and pay tax on that, to avoid the hassles of CA Audit etc?
3. Does Zerodha expenses need to be deducted from the turnover, while calculating 6%on turnover?
1. ITR3.
2. You can show 6% of turnover. But best to use a CA.
3. Yeah you can. But net profit has to be 6% of turnover or more.
Hi Nitin,
I have salary income of 20L and intra-day speculative income of 700 (Just 3 trades) and short term capital gains of 36,000 and LTCG of 25000.
Which ITR form is applicable for me and do I need auditing for that and fill all Balance sheet and P&L ?
Regards,
Venkat
You can use just use ITR2. Show intraday maybe under other income and pay tax as per your IT slab. No audit and all.
Hi Nitin
I am a salaried person and My salary is Rs 6,00,000/-PA and i have FnO loss of around Rs 50,000/-. Total turnover is below 3 Lac.
Also have Capital Gain from Equity.
Please advice which ITR to be filled and Does i need to go for Tax Audit ? Very Confused on this.
ITR3. Yeah, ideally an audit would be required.
Hi Nitin,
I have participated in the buyback of Infosys. However, I can’t see the tendered shares in the P&L statement. The profit was around 16,000 & I held those for short term. Should I need to pay the capital gain tax on the same?
Please advice
Thanks
Yeah you will have to pay tax on that.
Hi,
I file ITR 3 .
For the AY 2018-19 I am using the New ITR 3 PR2 Excel utility.
While generating XML I am a message is getting displayed on CFL Sheet as:
“CURRENT YEAR SPECULATIVE BUSINESS LOSS SHOULD NOT EXCEED THAT TOTAL SPECULATIVE BUSINESS LOSS SET OFF”
I Trade only in F & O so there is no speculative trade done
Kindly let me know what am I missing and is this issue is being faced by others too?
Please reply ASAP as last date is approching
Vijay Prasad
BEst to consult a CA for filing help.
Hi Nitin,
I am a salaried person. I got in to share market last FY only. Apart from investment, I did following activities on Zerodha:
1. Buying & selling equity shares (short term), 2. Intra-day equity 3. Options (incurred losses in all).
I understand that I need to fill ITR3. Could you please tell in which part or forms of ITR3 the above activities would suitably reflect? Thanks in advance.
Best to take CA help for filling ITR3 form.
I have income from Salary, Bank interest on savings, Dividend from equity, losses from trading F&O along with advisory fees of upto 1.6 lakhs and few MFs redeemed and reinvested.
Which form do I need to use ? I guess its ITR3 and show all the losses including the advisory fees. Pls confirm if its the correct way ?
Do I need to consider the profit realised on MFs which were held for more than a year and then amount reinvested in other MFs ?
I hope all this can be shown in ITR3 itself right ?
Thanks.
ITR3 and yes correct way. You have to show profit realized from MF held for more than 1 year under capital gains.
hi sir, for the FY 2017 ive total turnover of 2.7crore , whereas ive loss 62k from speculative , and loss of 55k on short term loss and 72k loss from F&O , so total loss of 1.89Lakhs . i dont have anyother source of income , so how should i file IT returns to record my losses to carry forward. please guide me. THANK YOU
Best to use a CA and file using ITR3 forms before due date.
Hi Nitin,
For intraday trades what should be the turnover? is it the margin money invested ? OR the total trade value?
Checkout the chapter on turnover.
In FINANCIAL PARTICULAR OF BUSINESS section of ITR 4 I have one query that IS it MANDATORY that ASSETS and LIABILITIES should be EQUAL or SAME as it is supposed to be in the BALANCE SHEET of ITR 3…as in ITR 4 it is supposed that whomsoever is filling is not maintaining BOOK OF ACCOUNTS…so if I fill zero(0) in these MANDATORY COLUMNS: SUNDRY CREDITORS (LIABILITY) , SUNDRY DEBTORS and INVENTORIES while I fill some random amount like 10,000 in CASH-IN-HAND (ASSETS)…then my liability comes to zero while my assets become 10,000 in E17 and E25 columns of ITR 4 respectively as I am avoiding to fill TRADING ACCOUNT LEDGER BALANCE in any of these columns as most of the other traders also not showing LEDGER BALANCE in SUNDRY DEBTORS …Can I File ITR 4 without balancing total assets and liabilities in financial particulars of business section…Kindly reply @TAXIQ.IN @nithin…it would be a great help for me
By bringing Assets & liabilities details department wants the year end balances to be put in the ITR which are accurate . In case of IT scruitiny when you submit information should be same as you are filing.
Hi, Nitin
I file ITR 3 .
For the AY 2018-19 I am using the New ITR 3 PR2 Excel utility.
While generating XML I am a message is getting displayed on CFL Sheet as:
“CURRENT YEAR SPECULATIVE BUSINESS LOSS SHOULD NOT EXCEED THAT TOTAL SPECULATIVE BUSINESS LOSS SET OFF”
I Trade only in F & O so there is no speculative trade done
Kindly let me know what am I missing and is this issue is being faced by others too?
Please reply ASAP as last date is approching
In schedule BP you must be filling incorrect details which is not in sink with Scheule CFL. Best to consult a CA.
Hello Nithin,
I am salaried employee and I have an account on Zerodha.
I have done intraday trading on Zerodha during FY 2017-18 and I had total turnover of Rs. 29962.20 and total loss as Rs. -16567.50.
Please suggest:
1. Which ITR form I need to fill.
2. Whether audit is required for above trading.
3. What documents will be required for intraday audit.
ITR3. Do go through all the chapters.
Hi, Nitin
I am a salaried person and i have some STCL from share trading(intraday trading) . Traded value is more than 2cr. but i am not a regular trader , i had traded only one month in f.y. 2017-18 and now i am not trading any shares . Should i show the trading in ITR ? i don’t want to c/f the loss. Which ITR should i file ITR1 or ITR2 ?
Best to show this loss on ITR2.
dear sir my trading activities involve
Intraday profit/loss- 33098(loss)
Intraday turnover- 45238
short term profit/loss- 54481(gain)
short term turnover- 2843642
f&o profit/loss- 200000(loss)
f&o turnover- 1688796
1-I want to know which ITR form is required to be filled?
2-Is it required to get audited?
3-can i fill ITR 3 while showing f&o loss under business loss and intra day loss under speculative loss ?
1. ITR3
2. If your total income over 2.5lks no, but if lesser yes.
3. Yes
Hello,
I am a beginner and maybe there are others like me who are in a similar peril.
Lets say total turnover from trading in Futures and Options is 2.5 lacs and the profit as given out by the broker is > 6% at about 18k.
So is this the figure that is taken to decide if audit is required or not? If yes then no audit is required. That makes life simpler probably.
Now, there are expenses that are listed as direct expenses due to trading as reflected by the brokerage and others like for data, training etc that could total to more than the 18k profit.
One option is to book the 18k as profit in form 4 which description says “For presumptive income from Business & Profession” and bear the tax expense as per the slab and also the charges etc as net loss due to trading.
The other option is to use the Form 3, where the profit can be shown as above but the expenses can be reflected and carried forward. This is a tempting proposition, since who will like to incur / book loss!! For this one will have to hire a CA as far as I can see from what has been stated above; even though it is not mandatory, only because its too difficult otherwise. And CAs don’t come cheap either and to get one for such a small job is another problem.
I was wondering if a sample completed Form3 could be published with only trading income / loss (mapped to the brokerage statement) so that we can learn from it and try our hand at it. The sample provided appears to have additional business income etc (or is my interpretation incorrect?) and is a bit complex.
Please do reply and consider ASAP.
Thanx and bst rgds,
Praveen.
Praveen, this self filing of ITR’s is very risky. We have not put a sample, just to ensure people use CA for this. There have been cases where clients have misfiled because of no knowledge on filling ITR.
Hello Nithin,
Thanx for the reply. I understand that its best to get the return verified and filed with help from a CA. Thats also the “politically correct” way!!
Quite a few CAs are themselves not clear/interested in undertaking filing for trading accounts. Further, its not easy to get a CA to undertake such a small job and also it costs much more than what one has earned!
Zerodha has provided a lot of resources. There already is a sample excel and filled form for an earlier version.
There is also the video but that is with using clearTax.
So I just thought that providing a sample which clearly gives as to what goes where from your statement will go a long way in helping rookies.
Please do give it a thought.
Thanx and bst rgds,
Praveen.
Dear Sir,
I am a salaried person and having salary of Rs. 11 Lakhs P.A.
I had traded in Intraday Margin Trade and incurred Speculation Business Loss from same of Rs. 291000.
Total Sales value is around 6 Crore.
Combined Difference of all trades whether positive or negative is Rs. 12 Lakhs.
Please suggest whether Audit is required.
TO carry forward the loss, yeah needed. Otherwise you will have to show 6% of turnover as profits and pay taxes on that.
Hi Sir,
In ITR 2, Under “Schedule CG” Section A-2b-iii is “Expenditure wholly and Exclusively in connection with Transfer” – is this related to brokerage+stt+gst ?
Can I put 0 (zero) in this field and include the brokerage in total cost of aquisition/Buy price it self ?
Is there is any easy way to calculate total brokerage +stt+gst paid for this year as it is half VAT and half GST looks like ?
Thanks in Advance.
You need to exclude STT as cost, rest all can be taken as expenditure. If your cost of purchases is already marked up by these cost then dont reduce again. And in case of sales if its Net sales price + Stt , then no need to reduce again.
Hi Nithin,
I don’t have any salary income or any other income, My incomes are
STCG – 2 Lakhs (Profit)
LTCG – 40 Lakhs (Profit)
Dividend income – 1 Lakh
Business Loss 10 Lakhs on 20 Lakh turnover in F&O.
I have to file ITR3. I have to maintain books of accounts.
But my question is should I compulsorily go for tax audit ?
or
Can I show my loss in ITR3 under presumptive income and just maintain books without going for Tax audit?
Because my total taxable income is below 2.5 Lakhs but my total income including LTCG and dividend income is much more than 2.5 Lakhs even after including the losses incurred in business.
Thank you,
RegardsPrasanthi
Hmm.. I’d say best to have it audited to carry forward the loss.
Won’t it get carry forwarded without Tax audit? What is the law saying…My problem is I am unable to understand the rule position….
Is it saying,
if my “total income” exceeds 2.5 Lakhs I should go for Tax audit
or
If my “Total taxable Income” exceeds 2.5 Lakhs I should go for Tax audit
This confusion is not been cleared by the Chartered Accountants I have approached.
Would you kindly clarify this…..I trust Zerodha more than CAs….(Thats what experience led me to.)
The law is actually vague, but our understanding with experience is: if your income is less than 6% of your turnover and if you have taxes to pay (total income more than 2.5lks), then you would need audit.
Sir,
Where to show the closing stock of shares, which i am holding as on 31/03/2018, as there is no option to disclose stock of shares but raw material, finished goods.
I treat share trading as business income and therefore closing stock and no current investments.
Best to speak to a CA for tax filing help.
Hi Nithin,
Thanks in advance for your help.
My Taxable Salary is a little more than 5L.
My Intraday Profit: 1691 (Turnover 3832)
My STCG Profit: 1659 (Turnover 132732)
F & O Loss : -1785 (Turnover 7890)
1. If I don’t want to carry forward my F & O losses, Can I submit ITR2 and mention Intraday profit as Other Income?
2. Or is it compulsory for me to file ITR3?
3. As I have F & O loss, do I need to go for Audit?
Many Thanks,
Srikanth N
1. hmm.. ideally no, you need to use ITR3. But since turnover is so little, maybe speak to your CA.
2/3. Best to speak to CA
Hi Sir,
Mine is ITR2, and my sister’s ITR 3 as she has some speculation income.
I am just hearing in news that ITR filing deadline extended to August 31, is it for ITR2 and ITR 3 folks as well.
little confused here can u please help
Yeah, extended for ITR3.
Hello Sir,
I have trading account with Zerodha.
My trading activities involve
Intraday profit : 3146
Intraday turnover: 6874
Short term loss: -8713 (loss)
Short term turnover- 332604.
I am filling ITR-3 and it is almost completed. I have 2 queries.
1. Can i show the short term loss ? if yes, can you please tell me the where in the ITR-3 ?
2-Is it required to get audited?
1. Best to speak to a CA, yeah u can show short term loss and carry forward.
2. No
Hello sir,
In instructions for itr-4 form its mentioned not to use for speculative business income?
So can one day trader really use itr-4 form for presumptive scheme?
will there be problems from it dept if use itr-4 for intraday?
i want to avoid bookkeeping and audit.
You can just use ITR3 and show 6% profits. Do speak to a CA.
But i want to avoid bookkeeping and file itr-4 if possible,
nithin sir , can day traders opt presumptive scheme(itr-4)?
is there any legal obstruction?
Hmmm.. I don’t think you should take the presumptive scheme. In today’s day and age where everything is paid through cards/online, bookkeeping technically is happening automatically.
Hi Nithin,
Excellent explainer. In your previous comment you have said
Nithin Kamath says:
July 4, 2018 at 11:17 pm
ITR3. If you have no taxes to pay, then you can avoid audit. No need to add delivery turnover, it is capital gains
My question – in your sample XLS Computation and ITR – you have an example of Purchase of Shares/Sale of Shares (Equity Delivery) added to the P&L statement. Is that required?
Shouldn’t it just be taken as STCG under Sec 111 and not included in turnover?
Hi, Equity delivery can be shown both as a business income or as under capital gains. If showing under capital gains, then no need of turnover etc.
Sir if I use presumptive taxation scheme 44ad and pay tax showing 6% of turnover then if next year I get 25% profit then under 44ad I have to mandatory show 6% next year also or we can show 25% as 44ad scheme has to be carried for 5 years
You can show 25% next year. More is no issue.
Hi Nithin,
I just down loaded excel file of ITR 4.
What I gathered from there is that in P&L section positive settlements means FNO trades, positive trades means intraday and sale of share means where delivery taken .
1. First of all I want to know whether I am correct or not in above explanation.
2. If yes, then where do I have to show my negative settlements and negative trades.
3.If not, can u please tell me that where can I show my intraday trades (speculative) and FNO trades (non speculative)?
hmm.. I don’t think your understanding is correct. For ITR filling, suggest you to consult a CA.
Drear Sir,
Looking at all the queries and your reply, it’s really helpful in filling return. There is also a fact that that no one is gaining out of the trading business…almost 99% people are having losses.
Sir, I would request you pls have some online sessions on this as people are actually incurring heavy losses , specially from Intraday and F&O, out of their hard earned money.
Thanks.
I have income from FD only which is less than 2 lakhs. I made some losses during the year in intra day trading. Which ITR form should I fill to carry the losses ?
ITR3
Dear Sir,
My Salary Income is 1.8 lakh but i have faced a loss of Rs. 300000 in 2017-18. Almost all losses are from FnO (275000) and remaining from cash market. My FnO turn over was around 80 corers. Which form do i need to fill? can I carry forward these losses? whether Audit is required? if yes what are the approx. audit charges..
plz guide.
ITR3 and yes you can carry forward. Btw, turnover is not contract turnover, check the chapter on turnover.
Superb module on taxation.
I am self employed professional and I am already filing ITR 3 for few years. I have income from profession of 3.5L
Since last year I also started trading in equity intraday, equity delivery and F&O.
My total trading turnover is 48364 with a net loss.
Will I need an audit?
If yes, can I avoid it by not carry forwarding the loss and report 6% profit and pay tax on it?
Yeah you can show profit and pay tax.
Hi sir
I filed last year tax in form itr4 because i had 20 lakhs income from online advertisement publishing
As i filed under itr4, i should continue filing under itr4 for next 4 years too.. it is compulsory right?
but this year’s my incomes are as follows
from online advertisement business = 3 lakh
SHORT TERM GROSS PROFIT= ₹1,16,18,738.50
SHORT TERM TURNOVER= ₹2,01,17,827.30
FUTURE& OPTIONS GROSS LOSS ₹-38,29,110.00
FUTURE& OPTIONS TURNOVER= ₹2,31,16,197.41
Please help me which forms to file tax??
I am ready to pay 15% short term capital gain tax
can i carry forward the 38.29 lakhs future&options loss to next years??
please suggest me the best way
Hi Sir,
I have NO Salary Income for last year.
Short term capital gain 204000
speculation gain 11200.
I think I need to submit ITR 3, people are saying ITR submission date extended only for “Salaried” People. is it true ?
for my case also ITR submission date extended or not ? Request you to suggest.
Yeah dates extended till Aug 31st for everyone.
I m professional doctor having net income 12 lac per year. Short term capital gain 40000. I was filing ITR 4 for presumptive income. Now where can i show my short term capital gain. This year first time I have capital gain. Is it possible to show short term capital gain on ITR 4. if need to file ITR 3 then how can I take advantage of presumptive taxation.
Hello sir,
i am student and ive been trading from a year or so ,
my short term loss is -52,000
intraday loss is of -70,000 (intaday turnover is 86k)
FnO loss is of – 72,000 (turnover of 2lk)
my questions are
1.which ITR should i file?
2.If i dont want my losses to carryfrwd , is required to have tax audit
3.can i show my intrady n FnO turnover @6% profit ? since i am in netloss n dont have income more than 2.5L
1. ITR3
2. Since u don’t have any other income, no need.
3. U don’t have to show a profit, u can just a loss and not get audited.
Sir,
We are facing lot of problem in filing of IT return due to audit compliance in case of loss / profit. It is requested that you should start a service of tax filing and audit etc for the zerodha members. You can also decide a suitable amount for it. It will be very helpfull for the small traders like us those working on zerodha trading plate form.
Thanks,
Hello Sir,
You have said in Taxation for Traders Chapter that an audit is required in case of intraday losses under Section 44AD. But Section 44AD applies to ITR-4.
Does an intraday trader has to file ITR-4? If not, then why should he get his return audited under Section 44AD if he is filing ITR-3?
I have an intraday loss of around 270/- (Turnover 294/-). Would it be wise to simply not report this loss in my return & file ITR-1 only?
I think you should file ITR2 and show this under short term capital loss. Since the value is so less.
Ok, Thank You. But can you please answer my first question also.
Does an intraday trader has to file ITR-4? If not, then why should he get his return audited under Section 44AD if he is filing ITR-3?
If you file ITR 3 , then you need to choose No account case without Audit or file ITR 4 where you declare a Income where it is not. Sec 44 AD can be filled both in ITR 3 as well as 4
ITR 3 a portion is given and ITR 4 is specially for that purpose only.
Hi Sir,
I am salaried person who receive salary in foreign bank account here in UK.I will be NRI for current financial year 2018-2019.
I also do stock market investments/future & Option Trading/IntraDay Trading/Mutual Fund investments. I have some queries .
1. As a NRI trader will my global income(Income from salary in UK) comes under taxation in India or only the trading ?
2. Which ITR I need to file?
i have a salary of rs. 412560
and i have a equity short term loss of
Gross Profit Total Charges Net Profit
-23517.90 9456.30 0.00 -32974.20
Charges
Brokerag Turnover charges STT Service Tax Stamp Duty SEBI Total charges
2750.25 1 063.88 3999.00 686.54 912.72 43.91 9456.30
and i have a
Intra-day / Speculative profit -15701.90
Intra-day / Speculative turnover 52799.10
Short-term profit -7816.00
Short-term turnover 111717.40
Long-term profit 0.00
Long-term turnover 0.00
Futures realized profit -12245.00
Options realized profit 0.00
Total realized profit -12245.00
Futures unrealized profit 0.00
Options unrealized profit 0.00
Total unrealized profit 0.00
Futures turnover 33995.00
Options turnover 0.00
Total turnover 33995.00
to carry forward the losses what to do and what is short term profit
hmm.. you have to file your ITR in time to carry forward losses. Can you go through all chapters.
Hi
My losses from futures is 3.6 lac after setting off stcg from shares. No other income or transactions
1.do I need tax audit?
2 can I file itr 3 without audit and carry forward my losses.
3 is it ok not to file the return at all ?
Thanks
1. Depends on turnover. Do go through chapter on turnover.
2. Same point 1
3. Do file your ITR, chances of getting notice is higher if you don’t.
Hi,
Thanks for the reply. My turnover is around 10.5 lacs for fno. I have only losses and no other income at all. So technically I don’t need audit. And should be able to carry forward my losses without audit.
But heard that still I can get a notice to get it audited. Pretty confused. Can you clear this?
Audit is expensive too though I have only a few transactions. Could avoid it if not needed absolutely. Pls help
Thanks
I think you can file the ITR without audit and carry forward loss. If you do get a notice, maybe u can explain to the ITO why u didn’t.
i am tailor, gets income @ Rs. 5000 per month, my short term gains are Rs. 3, 00, 000 , long term gains are Rs. 60, 000 & intraday profit Rs. 3000 during AY 2018-19. No bank Interest or house rents.
1. Which ITR, i should use.
2. Should i maintain any records
3. Should i get audited my capital gains statement
4. I am computer literate … can i do e-filing file my self
1. Ideally ITR 3 as you have intraday income as well. But since it seems extremely small, maybe u can show as other income and use ITR2. Do speak to a CA.
2/3/4. Audit only for business income, in this case your income as tailor and intraday profits. If intraday profits >6% of turnover, no need of audit. You can file yourself, but suggest not.
Sir, Thank you for timely & valuable suggestion
Hello, Can please help me to understand what needs to be filled in ’49. Balance brought forward from previous year’ in ‘Profit and Loss’ schedule of ITR 3? For example, Say my previous year total income was Rs. 2,00,000 and my personal expenses/drawings for living, were Rs. 1,80,000, so should the remaining Rs. 20,000 should be written in ‘Balance brought forward from previous year’ field in ‘Profit and Loss’ Schedule this year? Also, In ‘Part A – BS’ schedule, what should be filled in ‘4c. Profit and Loss account/Accumulated balance’ based on the above given values?
Dourin silveira
Sir,
i filed my itr for FY 2015/16 after getting audit,I did incurred losses in delivery as well as in speculation and i did sold all my shares in the same financial year(Sale/purchase in same FY}. but my CA made mistakes
1-he entered my delivery shares(few) entries in speculation loss. resulting to high speculation loss and less delivery loss.
2-shown less brokerage charges and balance brokerage included in total speculation loss.
3-now i got IT NOTICE under sec 143(2) for the same FY
NOW how i should proceed. please let me know.
Respected Sir,
I am govt. employee as asst. prof. in college & i have gross salary for 2017-18 is approx. 7 lac. I did intraday. I also have 12 Delivery Stocks & not able to sell because their price is very much down & if i will sell them then my loss will be near about 2.5 lac.
For this 2017-18 year i got the P&L statement in which following is shown
TOTAL Purchase Value =1,65,56,600
TOTAL Sell Value = 1,66,22,600
Dividend = 2500
Profit less than 1 year = 45,500
Profit greater than 1 year = 20,600
Total Profit = 68,600
Now kindly suggest me that which ITR form i have to fill & what process i have to follow. and also tell me that
ITR3. Can you go through all the chapters to understand what needs to be done.
Hi Nitin,
Your responses are really helpful in understanding the taxation concepts. Thanks for taking out time to help.
My query is as below
Sal Income: 10Lakhs
INTRADAY GROSS PROFIT ₹29K
INTRADAY TURNOVER ₹34K
SHORT TERM GROSS PROFIT ₹37K
SHORT TERM TURNOVER ₹27Lakhs
F&O GROSS PROFIT ₹-5 Lakhs
F&O TURNOVER ₹28 Lakhs
Kindly suggest is an audit required as the net turnover is less than 2CRS and which ITR should I file?
ITR3 and yes get it audited.
Hi NITHIN
What is code for nature of business for intraday FNO?
Hello Nitin,
Thank you for this article with very precise and clear explanation.
Kindly clarify on this one minor query.
My primary income is salary
I have filed ITR-3 in previous assessment year due to “loss” from speculative trading.
For AY 2018-19 I have not executed any speculative trade. My income heads are only salary and capital gains from STT paid equity.
I would like to carry forward the loss from previous year.
Should I choose ITR-3 and set this years numbers for turnover, profit, loss to zero and only fill the carry forward losses?
Or
If I use another ITR-2 and can I carry forward losses in future fillings where I may have executed speculative trade
Thank You
Gururaj
You can carry forward just with ITR2.
I am working public sector bank ,i draw 540000/- per annum and i also indulge in interaday trading then what type of itr i have to fill and what will be my occupation code.
ITR3, maybe 130010, but do speak to a CA.
In the last FY 2017-18, I have loss in Intraday (Turnover below 2 Crores) and Profit in Short Term Capitals and also my salary income is between 3.5 Lakhs to 4.5 Lakhs. Please suggest can I go with ITR 4 form as i dont want to go in auditing stuff.
With TIR4 you will not be able to show a loss and carry forward it. And you will have to pay taxes based on % of turnover. Best to use ITR3.
Hello Sir,
I have loss of only -7678 against turnover of 8152 in Intraday
and 65700 profit in Short Term
and Salary income of rupees 4 Lakhs
Since my intraday profit is less than 8 % of turnover therefore I have to go for Audit to carry forward my losses in through ITR3
But my Tax adviser is saying to go with ITR4 and asked to declare 6% of profit against 8152 intraday turnover under section 44AD and pay tax on it along with tax on Salary and Shorterm gains in their respective heads.
Please suggest, can I go with ITR4
If you are okay with not wanting to carry forward the loss, yeah it is okay thing to do.
Dear Nitin,
I am a Salaried person during FY-2017-18 and my Salary is Rs. 4.00 Lac P/A , I have made a Loss of Rs.24K in Intraday Trading with Turnover of Rs.1,65,000/-. I am filing ITR -3 My Question is :-
How to Show Turnover of Rs. 1,65,000/- in ITR-3 FY-2017-18 and 6% Profit in ITR-3 , i want to declare 6% Profit on Rs. 1,65,000/- i.e Rs.9,900/- to avoid Tax Audit.
Many people are confused how to show in ITR-3.
Thanks & Rgds,
ah, best to use help of a CA to file your ITR. He will be able to help you out.
Hi Nitin,
Is it possible to get updated Sample ITR-3 forms instead of the older ITR4 forms?
Thanks.
I’m a 22yr old student coming under (0-2.5 lks) tax slab & totally new to trading(zerodha client since 1yr) & taxation(never filed ITR)
I had gone through the amazing resource of info. at Varsity’s module-Markets & Taxation.
Provided below is the data from my Q:
Intraday/Speculative profit – 5,749.85 Intraday/Speculative turnover – 5,749.85
Short-term profit – 44,382.20 Short-term turnover – 19,02,355.50
Long-term profit – 0 Long-term turnover – 0
Other income from Bank interest&FD,etc – less than 15,000
1)Can you please tell me which ITR form should I file ?
2)Do I need to get tax-audited ?
1. ITR3
2. For intraday, because the volume is so less you can maybe show this income from other source and maybe just use ITR2 and avoid audit.
income: 10L
intraday loss = ~4L
intraday turnover: 5L
DO i need audit under sectino 44AB
Yeah, best to.
Hi,
Can loss made in FnO, offtake the income from other sources eg interest on FDs for calculating Tax liability.
Regards
Yeah. Do go through all chapters.
Dear nithin,
Im a private employee with less than 3 lakhs p.a salary and i trade commodity intraday only and made loss around 50000 and contact turnover is showing at 8 crores and my auitor says he will file ITR2 short term capital gains to avoid audit is that fine…pls help
hmm.. not really the right thing to do. Also contract turnover isn’t the turnover, check the chapter on turnovers.
I am a student would i still be supposed to pay taxes on my capital gains.
Yes, if your total income is above 2.5lks
Thanks a lot for the amazing piece of information provided in this module. I have 2 questions sir.
1.) Can the speculative and non-speculative losses be carried forward by filing ITR-2? (turnover is 1L, loss is 40k)
2.) Does ITR-3 compulsarily need an audit?
1. In ITR2, you can only declare capital gains. For spec/non-spec business, you have to use ITR3.
2. No
Hi Nithin,
Need your small help. I have Salary Income of 20 lacs per annum and was submitting ITR1 every year. However in FY 2017-18 I had FnO loss of 16 lacs on Total FnO Turnover of 3 Crores. I want to carry on my losses so that I can set it off with this year Income. My question is:
1. Do I need to submit Audit Report? If yes, is it compulsory to submit or there is any way out.
2. Which ITR will be used here, Is it ITR3 or 4?
Thanks in Advance
Regards
Ajay
1. To carry forward the loss, you will need an audit.
2. ITR3.
Hi. I’m a Zerodha user. I’d like to know if I’ve to use ITR3 along with audit?
Income details:
Rental income = 2,80,000
Agriculture income = 7,00,000
F&O Loss = 3,00,000
Turnover is well below 2 cr.
I think there’s no tax liability if I add rental income to F&O loss. Is that a correct understanding? Kindly guide if audit is required?
Yep
yes to what? A) is audit required? B) is there any tax liability i.e. is it considered before adding loss or after adding loss? C) Can I show F&O loss as capital loss instead of categorizing it as business income? Thanks.
Yes, no tax liability. Audit also not required as no taxable income. But I’d still say best get an audit done. F&O loss can’t be shown as capital loss.
Hello ZERODHA,
I am student & have nil salary income , but trade stocks in kite
Intraday profit : 6,000
Short term profit : 45,000
Long term profit : 0
Bank FD : 20,000
Should i fill ITR ??
Not mandatory, but best to file ITR.
Hello Nithin Sir
I am salaried 7 lpa..
i did only intraday equity trading ..my turnover 3400 and loss 2800
1) can i simply file itr 1..as i dont want to carry forward any losses
2) if i file itr3….any audit needed?/
Not ITR1, but since turnover is less, maybe you can use ITR2 and show this under short term losses. No ITR3/Audit.
Dear Nithin Sir,
on selecting nature of business as investment activities….cleartax is giving the follwoing error: “You cannot choose Investment activities because you have declared Presumptive Income(Section 44AD). Please choose a (Professional/Freelancer) business nature name or change your section for Presumptive Income.”
How do i then show presumtpive income?’
Regards
Best speak to them itself.
Hi Nithin,
I do intraday and equity on Zerodha.
Below is my tax statement:
Intra-day / Speculative profit 31677
Intra-day / Speculative turnover 43362
Short-term profit 25144
Short-term turnover 539229
Please i’m salaried, abt 12 lpa
I think i need to first pay taxes for Intraday and Short term profits? If so then how many percentage of each type of profits?
Then which ITR to file? I haven’t filed any other ITR except ITR-1 (previous years). Would really appreciate your prompt response, its so confusing.
Thanks in advance.
And what about STT paid for trading done on Zerodha, eg. i paid Rs. 2051 of STT (total about rs .2700) charges to Zerodha. Is there a provision to deduct it from profits? I mean tax exemption on these charges?
Your taxes on net income, so post all charges.
ITR3. Do go through all the chapters.
I did delivery based frequent share trading and made a huge loss of Rs. 4 lakhs. The turnover was Rs 5 crore over a period of one year. I did not show the loss in the ITR. Now I got a notice from IT. Will the P and L issued by HDFC Bank will be enough for me to convince the IT that I made a loss and hence did not report.Please adv.
Yes, the P&L report, the trading ledger, and the bank statement to show how much was transferred in and withdrawn out of trading account.
Hi Nitin,
My salary income – 9.3 Lacs
Long term capital gains from MF – 3.09 Lacs
FD interest – 0.65 Lacs
Options Turnover – 24.66 Lacs
Options realized profit – 0.50 Lacs
Need your advice on
1. which ITR should be used? ITR3 or ITR4?
2. Is Audit must? CA says we can have expenses written against the income and show business loss, so no Audit is required.
Thanks in advance.
1. ITR3
2. Hmm. Ideally need an audit. If your CA has found a way to avoid, maybe you can follow that route.
HI Sir,
In the new ITR 2 when I submitted last week. They have asked for separated interest income such as savings interest, term deposit, others etc.,
I had 65000 of chit fund dividend, as chitfund income is a nature of interest I have mentioned it under
Income from Other Sources -> Interest -> Others.
Did I do any thing wrong here. Could you please suggest.
Thank you in advance.
Nothing wrong, what you have done is correct.
This is super information on taxation, many thanks and kudos on the great job Nithin & Zerodha! Couple of queries:
1. I need to use ITR3 since I have carry forward losses on capital gains since a few years (I have salary income). Now if I have Non speculative (F&O trading) business losses (or profits less than 6%), to avoid audit, can I still use Presumptive income @ 6% and file ITR3? Or in other words, if I declare Presumptive income do I have to compulsorily use ITR4 only (where I cant show capital gains) or can I use ITR3 also? In the Income Tax dept website the ITR4 is specifically stated to be used “For presumptive income from Business & Profession”, hence the question.
2. If I declare Presumptive income, can I offset those 6% profits against previous years’ business losses (when I didn’t use Presumptive income) being carried forward?
3. Lets say I have business losses in Year1 – did an audit, filed ITR3 through a CA and carried forward the losses. In Year2 I did not do any trading so filed ITR2 where there is no place to show Year1 losses as carried forward. In Year3 I start trading again, can I setoff Year3 gains against Year1 business losses?
1. You can use ITR3 and show profits more than 6% of turnover.
2. If using ITR3, yeah you can technically.
3. Yes
Can I postpone paying advance tax if ready to pay penal interest on the amount.
Regards.
Yes
Hi
I am doing trading on my wife Pan, No salary and no income on my wife’s PAN.
I have only losses in F & O and turnover is less than one crore.
And some gains in Equity. Which ITR I should file for carry forwarding losses for next 8 years?
Thanks
Hari
ITR3
My turnover is 34000 in intraday and furures and profit is 3510. Capital gains rs 5645 and salary income. I have opted for not liable to maintain books of accounts in itr3. Can I opt for the same plz respond.
Yeah, no issues at all.
Dear Nitin
Key takeaways for me as far as filing of return is concerned:
1) I am filing ITR3 with audit u/s 44AB since my profits are less than 8% of t/o
2) +ve turnover is to be shown in receipts in P&L
3) -ve turnover is to be shown as purchases P&L
Questions:
1) If I do 2 & 3 above, there would be a higher profit than actual profit because of additional receipts to be shown in case of SALE of options (I have always taken that premium when I have actually sold options and not when I have squared off the options of buy trade)
2) What happens to things such as brokerage, STT, Service Tax, Sebi ToT, Stamp Duty and others. Do they have to be shown separately for Receipts and Purchases or they can be shown together at one place.
Thanks
Manish
1. This is just to determine turnover and determine if u need audit or not.
2. Can be shown together.
hi
Im a freelancer and i have opted for presumptive tax scheme and i wanted to start trading .
my question is
if i start trading will i be able to file my income tax in that same scheme or otherwise i have to file my income tax in ITR-3 form
Another question is
in case auditing is required i wanted to use your partner site tradetax.in there are 3 schemes available which one should i opt for
You can continue to use the same scheme unless you are evading taxes by using that way out. But best to use ITR3. About the 3 options, you need to chose whatever best suits your need.
Thank you for the rly
But my doubt is
1. as i have opt for presumptive tax scheme 50% of my income is exempted instantly but in case if i do trading and my turnover exits 50lakhs i cannot use that scheme am i right ???
2.basically my question is as they are two different income will I be able to use 2 ITR forms
ITR4 for freelancing and ITR 3 for trading
1. Hmmm.. yeah
2. Can’t use two ITR forms.
Thank you Nithin Kamath
My turnover is around 32000 and loss of 7000 in intraday and 5000 in futres and com.I have filed itr3 showing 8% profit as I did not want to carry forward the loss and also auditors demand huge money for auditing the meagre turn over also most of the local auditors does not want to do as they have bigger work. Will this create any problem if there is scrutiny. Can I revise now by auditing and show the loss (filed within due date) if required.Please respond.
Hmm.. there shouldn’t be any issues. You have not evaded taxes.
Hi,
Awesome chapters!
Wanted to get clarity around the charges incurred in the intraday gains(business income)
Example:
Business income = 10,000
Charges(brokerage, STT, etc.) = 4,000
Is my tax liability 6,000?
Yes
Hi Sir
I have delivery based buy value 5,15,000 and sell value approx 4,92,000.
No Intraday, No F&O No LTCG.
This is for next year. I have sold my all holdings and shifted to fixed deposits. Not planning to do any more trading for this year.
making around short term 23000 loss. No other income. Total income coming less than 2,50,000.
which ITR form should I be filling and I don’t want do CA audit as it is very costly.
Please suggest.
ITR2. No need of audit.
Sir i have started investing from November 2018.Do i need to submit ITR?
For FY 18/19. You have to do it only after the end of financial year.
Hello,
First of all, thank you for this awesome stuff. Greatly appreciated!
I have a question for you. I am a salaried employee (around 9 LPA) and I wanna trade Futures. Let’s just say, I have a turnover of 10,00,000 and a profit of about 2,00,000.
1. If I understand it correctly, I can file ITR3 or ITR4 without audit.
2. My question is – Can I file ITR4 and enter an amount greater than 6% of Turnover under section 44AD in this case? My understanding is 6% of Turnover is minimum and not the maximum. Am I correct? This way I can avoid going through that ITR3 garbage.
This is from ITR4 instructions – Enter presumptive income under section 44AD. In Column E2a, enter the presumptive income computed @ 6% of Turnover mentioned in E1a, or a higher sum. In Column E2b, enter the presumptive income computed @ 8% of Turnover mentioned in E1b, or a higher sum.
Thanks in advance.
1. Yeah
2. Yeah, 6% is minimum.
But it is best to use ITR3. You will be able to carry forward losses.
Need Urgent help
During AY 2016-17, I did derivative trading and lost 3-4 lakhs.my turnover was around 91 lakhs
I filled ITR1 instead ITR 3. I also did not get my account audited as I was not aware of these requirements.
Now IT department has sent notice under 142(1) asking why I submitted ITR 1.
Also they are asking for detailed audited account, P and L Account, Balance sheet etc.
They have given just 3 days till 12/12/2018 in E-proceeding option to submit reply.
Please help ,how to respond .
What is worst ,They can do. I heard there is penalty of 1.5 lakh for not doing audit.
Regards
Ravi
Sorry missed this, hopefully you have already spoken to your CA and responded. You could just say that since you had a loss, you didn’t think it was required to declare. You haven’t evaded taxes, you just have to explain to the ITO.
hey ravi finally what happened did u pay the fine or did they let u go
I am above 60 years and have no salary income and no pension for AY 2019-20. My main income is from interest on bank deposits and fall within the 30% bracket. Have been filing ITR 1 all these years. But in FY 2018-19 I have made an intraday gain of nearly Rs.1,100/- in the stock market. I have not made any LTCG or STCG by selling stocks so far this year. Should I continue to file ITR1 and include the small intraday gain under other sources or do I have to file ITR 2/ ITR3. I plan not to sell stocks during the remaining months of the FY or engage in intra day trading during the rest of the FY. Please guide me.
Best to use ITR2 and since turnover is small, maybe show as short term capital gains. Best to speak to your CA.
Hello Nithin…
I have a loss in Intraday as 2,74,000 and Turn over is 3,70,000
My Income is Less than 2,50,000.. say around 2,00,000
…
1) I dont want to carry forward losses
2) Is audit is complusory?
3) Can i Ignore this Bcoz i Stopped Trading
Audit not needed. Best to file ITR though.
So i can ignore tha trading part? Will i face any problem From IT dept?
Don’t ignore trading. declare it. Don’t need to do audit.
Dear Nithin,
Thanks for the chapters, it explained the entire system very well.
I have three questions
Q1. I am a software professional earning Rs. 17 L.p.a.
Can I declare my equity delivery based Short term trades as business income and claim my house rent (40% portion of my rent as the room) as well as the internet and newspaper bills?
Because since I have no registered business, I am not sure how will this work
Q2 I have started trading in shares and joined zerodha this year from september, and this is the first time I have heard of advance taxes to be paid. So I missed the september and december deadlines. And I have mostly unrealized loss of -1.5 L and realized profit of Rs. 12K
What do I do in this scenario? How do I pay advance tax now?
Q3 Regarding STCG loss, suppose I end the year at 40k profit gain and -1.4L unrealized loss (Overall Loss of 1 Lakh)
Using the method of tax loss harvesting, I sell the 1.4L loss and buy back the shares immediately to make it realized loss and immediately as unrealized loss
So can I show this Rs. 1 L as my loss and will it be exempt from tax?
Look forward to your reply
Regards
1. Hmm… it is best not to do something just to avoid taxes. If you are doing this very active and significant portion of your income, yeah you could.
2. You can pay with a penalty.
3. yep, you can do this. Maybe best to wait out for a couple of days before you buy it back.
Hello nithin,
I am a student and I filled my ITR3 according to the rules stated in these modules. I did not require an audit and P&L and balance sheet since I had a loss of 2 lac and my turnover was less then 1cr.
Now, I have received an notice from income tax department stating that “Taxpayer having income under the head “Profits and gains
of Business or Profession” but has not filled Balance
Sheet and Profit and Loss Account as required in
explanation (d) under section139(9) read with section
44AA”
what should I do?
Also, if I no longer wish to carry forward my losses, can I just ignore this notice and not file my ITR ?
Would it get me in trouble if I don’t respond to this notice? The notice just says that if I don’t respond my return would be considered invalid.
Don’t ignore the notice. I am guessing you haven’t filled the balance sheet and P&L if you have selected no account case. You can rectify by using the rectification form.
If I have net loss what do I fill in the sections Balance sheets:
a.Amount of total sundry debtors 6
b.Amount of total sundry creditors
c.Amount of total stock-in-trade
d.Amount of the cash balance
P&L:
Gross receipts
b. Gross profit
c. Expenses
d. Net profit
I only put my net loss in gross profit and left all the fields empty. I don’t know what to write in the other fields.
The balance sheet is your assets & liabilities such as Bank Balance, Balance with broker, Portfolio of Stocks etc and liability loans and your capital.
Hey Nithin,
As you said that by declaring a presumptive income of 24,000 on a turnover of 4,00,00 even though having a loss of 25,000 in F&O you can get away by maintaining all the records in ITR 4.
My question was after declaring the 24,000 presumptive income can the 25,000 be carried in the future as it is a non speculative loss?
No, you are essentially letting go of the loss.
Hi My name is Raj,
My wife have zerodha trading account and i manage to trade in F&O through her account. She is home maker & dont have any other income. My salary is more than 10lac per anum. Its from my earned money put in her trading account to manage trades. Now this year have made around 50000 loss due to F&O trading etc. Can i club that losses while filling my ITR if yes which form need to be used? Here i am discussing about clubbing spouse losses with my income.
Hmmm.. best not to combine. Anyways your salary profits can’t be netted off against trading losses. Filing separately is best.
Dear Nitin , I have question for you that. my taxable salaried income is 340000…
in Trade market the following are my performance….
Intraday profit
= -29.66k
Short term realized profit
= -953.1
Long term realized profit
0
Intraday turnover
=59.9k
Total charges
=8.43k
Other credits/debits
= -905.05
so what would be my tax?
No taxes as there is a loss.
Hi Nithin,
I’m a salaried person,have done equity day trading (Speculative) and F&O trading (Non- Speculative) . I need some clarification regarding ITR for the below mentioned details.
Salary = 6,70,000/-
Speculative turnover = 1,50,000/-
Non-Speculative turnover = 3,84,000/-
Speculative loss = -50,000/-
Non-Speculative profit= 52,000/-
Basically I’m at a profit of 2k, but the trickier part is
1. To carry forward the Speculative loss have to get audited by CA for which I can’t afford.
2. I cannot pay 6% tax of my total turnover , which is Rs 32,000/- approx (total turnover= 5,34,000)
3. I’ll come under 20% income tax slab if I declare profit of 52,000/-, which is Rs10,000/-.
So please help me out with this situation.
Really appreciate your time and consideration
hmmm.. Either 1 or 2. No other way.
sir, I want to ask you that i am a student with no income, but invested in stock market quite littlebit. Should i have to fillup my Income Tax Return (ITR). Please respond?
Yes, best to file ITR
Hi Nithin,
I wish to know one thing from you.
Which is the document I have to attach for filing ITR 2 for equity STCG?
Is it a seperate document from “Equity Daily margin statement”& “Combined equity contract note” what I’m getting in my mail on daily basis?
Could you please tell me whether it’s a single “P&L Statement ” or not.
Thanks
Varun KS
You don’t have to attach any document until you are asked for it. You just have to fill the information when filing ITR.
hi nitin sir,
I am a housewife and i do intraday and fno trading….also i am a graphic designer so i do freelance jobs…..i got near about 1,00,000 from freelance and from which i have a loss of 70,000/-…. what kind of ITR form should i use ??? …… should i have to do audit ???? i have zerodha account……what kind of document should i have to produce with ITR form ????? please help me …..
ITR3. You have to show your CA your P&L and ledger statement, tell him how much loss. He can use that to file your ITR.
ITR form 4 does not contain STCG. Does it mean that intraday traders can show business income only?
If using ITR4, otherwise use ITR3.
Hi Nithin,
1. Do I have to file ITR 3 if Trading is sole source of income (No salary income)?
2. I remember that filing ITR was made compulsory to continue trading from the coming year. I don’t quite remember the news, so can you enlighten me about it please.
3. This is my first time filing ITR, so
3a. Should I be filing it after March?
3b. Is posting the signed ITR-V compulsory to CPC in Benagaluru or can this be done online?
3c. If I need to submit ITR-V to Zerodha as well as per question 2, then how do I do it?
Regards
I read the entire module again and want to classify my trading as business income (speculative and not). I am overwhelmed by the ITR 3 sheet. Need answers for 2, 3b, 3c and any more assistance in process of filling and submitting ITR with help of zerodha tax P&L xml will be greatly appreciated. The ITR 3 sheet does look overwhelming.
I have a net loss in swing trades and would like to carry forward the loss without audit since I fall in below 2.5L income.
Just need answers for 2 and 3c now and help filling ITR 3 using Zerodha Tax P&L
1. Yes
2. For derivative trading, there is an expectation that ITR returns might be required. No news on this eyt.
3a. Yeah all filing before July 31st
3b.Can be done online
3c. Not required.
i’m salaried person + some business income + some STCG/LTCG. should i file ITR3?
Yea. If business income is really small, you could look at ITR2 as well.
hello sir iam trading on equity & intraday mcx currency f&o iam submit which itr form i submit
ITR3
Hi,
My salary is 12L
Fno Turnover= 52L
fno loss=9.7L..
Which ITR form should i use to carry fwd capital loss and is audit required?
ITR3 and yeah best to get it audited.
I am a student and the following are the details of my trading
Intra-day/speculative turnover 18483.65
Intra-day/Speculative profit -6939.55
short term 355.35
mutual fund -195.04
Which itr form should i have to use and is it necessary to go for audit
ITR3. No need for audit if your total income is less than the minimum tax slab.
Hello sir,
The contract note also mentions charges such as CGST, SGST, IGST, UTT.. Can such charges be claimed as expense?
Thanks.
Yeah.
Thank you sir. For leaving an answer.
Hello ,
I am earning 3 lacs p.a from salary and aslo doing trading result is as below;
Realized Profit Breakdown
Intra-day/Speculative profit -88407.50
Short-term profit -5407.50
Long-term profit 0.00
Total realized profit -93815.00
Turnover Breakdown (Scripwise)
Intra-day/speculative turnover 125071.00
which ITR should i file?
do i need to get audit?
ITR3. Not required, but do get a CA file the ITR.
Hi Nithin,
I am really confused as to go for audit or not as I am not willing to hire a CA and I am maintaining my book of accounts properly through Zerodha statements.
The situation is as below:-
Salary Income= 6 Lakh
Intraday turnover = 1.5 Lakh
Intraday Loss = (1 lakh)
Options Turnover = 64 Lakh
Options Loss = (4 Lakh)
Now, As I am maintaining my Book of accounts properly(P&L, Bank statements, daily contract statements etc), So can I skip the CA auditing part and fill ITR3 ??
Thanks
You can fill the ITR3, but you’d still require a CA audit in your case.
Hello Nithin Ji,
1- Can you tell me how to calculate Profit in F&O? I means Profit in case of F&O will be Net Profit=Gross Profit – any expenses like Brokerage, STT, GST and any other charges.
2- In case of presumptive option, how to calculate Profit. Is it same at point number-2?
3- As account in name of my wife and she used to filling ITR-1 last 3 years. Now this AY 2019-20 she wants , So which ITR should be appropriate. She has only FD interest and one elss div. arround 1000. Also her total turnover in F&O is arround 58000 and totl profit after deducting all the expenses as above is (+) 1500. Total income will be below 2.5 lac.
Thank You
1. Yes, profit after all charges.
2. Yes
3. ITR3, but no need for audit and all.
Sir,
I am housewife. And i opened account on your platform.
I want to know that what type of itr should i fill.
My investments are only 18000/- something and
Also i want to know that should i fill itr or not???
If you have only invested and don’t have profits or losses, it doesn’t need to be declared. Whenever you make something, you can use ITR2.
Hi Nithin,
My ticket number is Ticket #20190515152065 is not getting resolved.
May i know what is the logic behind , SL is allowed in range, however, if i want to book profit, range is not allowed.
Regards,
MSP
I am a man without earning. I borrowed money 1 lakh from my spouse and traded intraday trading and lost all.
Do I required to file tax return ?? Do I required any CA etc.?
Best to file an ITR. You could potentially do it yourself.
Can you provide a sample-filled new ITR3 AY2019-20 form for an F&O trader?
I don’t have any tax liability as my taxable income is well below the basic limit.
But I have F&O loss of Rs. 1 lakh. Can I carry forward this loss without audit?
Sample, we will try to post it soon. Yes you can carry forward without audit.
Dear Mr Nithin,
1)I have Rs 9.5 lakh income from profession (under 44ADA) in FY 18-19 ,
2)Zerodha account statement-
intraday turnover Rs 25335, intraday loss- 16637
short term realized profit – 41123
total realized profit – 24485
total charges(brokerage,STT,stamp duty etc) -11300
3) I got Rs 10 lakh from my father as GIFT.
my questions to you…
1)which itr should i fill ITR 4/ITR3?
2) Can i show my total realized profit as ” income from other sources ” in ITR 4?
3)Should i show that 10 lakh (received from father) as income and need to pay tax over it?
Please reply.
Thanks
1. ITR3
2. Best not to as you capital gains/loss as well.
3. No, gift from father is exempt, no taxes.
In the Balance Sheet page (Part A-BS) of new ITR3 form, there is no relevant space to fill for an F&O/Speculative trader. Have you checked it? Is it mandatory to fill this page if there is no audit?
This form is common for all the tax filers who have business income. There is no specific form for Equity traders. Now there are two variations one with books of accounts and another without If you are non-book then you need to fill a short balance sheet where you mention sum of creditors / debtots / cash as on 31st march 2019.
What exactly this Sundry creditors/debtors, stock-in-trade & cash balance with respect to an equity trader?
Sir,
When I enter details Profit of Intrday Shares in ITR No.3 AY 2019-2020 Column No.61 : “COMPUTATION OF PRESUMPTIVE BUSINESS INCOME UNDER SECTION 44AD” and thereafter enter same details in Column No.65 : “Turnover from speculative activity”.
It is computing the same Income Twice and accordingly levy tax on it.
Kindly let me know which Column No. to fill and which one to left out ?
What to do, kindly help.
Best to take CA help for filing, tough to support this through a forum like this.
Hi Nitin,
I have several queries and could not found answers to all in above comments:
From trading(Kite platform), incurred following losses:
Intraday: 70k (Loss)
Short-term delivery: 1.6lac(Overall Loss)
Long-term gain: 80K (Foreign investment)
My Salary is above 10lac
Questions:
1. Can I avail tax benefit on the losses incurred through short term trading? If yes, which form should I use to file ITR?
2. From whatever I have understand, intraday losses can be carry forward and that needed Audit. Considering question 1, what is the best option in your opinion?
1. U can’t adjust your short term loss with salary/business. You can carry forward and set it off against any future gains.
2. ITR3, show your intraday and short term loss and carry forward. You can set it off in future. Even speculative business (intraday stock trades) can’t be setoff against salary/other business.
Hi Nithin,
Can FNO gains be declared on ITR2 as STCG? I think if I use ITR3 (business income) I will fall under 30% slab thus paying more tax? Thanks.
Not possible on ITR2. No, using ITR3 doesn’t mean 30% slab, it is still the normal tax slab for an individual. Nothing changes, only ITR form.
Hi Nithin,
I have Salary Income of 20 Lakhs.
F&O Loss: 7 Lakhs
Intraday Profit: 50K
1. Which forms to use for Filing?
2. Is Audit required?
1. ITR3
2. Yeah
Hi Nithin,
I have no salary income.
Interest Income: 1 Lakhs
F&O Loss: 3 Lakhs
Received 3 Lakhs from my Son.
1. Which forms to use for Filing?
2. will Audit be required?
3. Do I need to declare 3 Lakhs received from my son?
Please advise.
1. ITR3
2. Not required
3. yeah, you can show it as a gift from your son. It is not taxable.
Sir,
I am a salaried person from private organization. I bought shares in 2017 and holding it as investment. I didn’t do trading in FY 2018/19 but shares are there in my demat account(which i bought in 2017). What ITR form should i use ITR 1 or ITR 2? Please advice.
ITR1 is okay, ITR2 is required when you sell and have capital gains to declare.
Dear Nithin and Team, I’m salaried person with FD income, in 20% tax slab, filed ITR1 till last year.
In last FY I’ve opened Zerodha a/c and done some random trades, tradewise report shows total 100 trades.
However summary shows, intraday turnover/profit -450 and short term profit -9350 (both in loss). no long term profits.
Can I file ITR2 and show all trades as short-term capital gains with total short-term loss of -9800 ?
Will there be any problem if I do that, as my trading frequency is 100 ? But I plan not to do any intraday from now.
It shouldn’t be an issue as the value is so less. But best to speak to a CA.
Hi Nithin,
I am mainly salaried person, this year (FY 18-19 and AY 19-20) I have 4500/- speculation Income from Intraday. Till last year I have used ITR 2 since I have Salary, and Short/Long term capital gain. Can I show this 4500/- income in other source of income in ITR 2 itself.
Please advise.
Thanks
Kumar P
Since it is quite small, maybe you can. But best to speak to a CA.
Hi Nithin,
What does that meaning of whether Audit required or not? Please clarify.
Thanks
Kumar
Check this https://zerodha.com/varsity/chapter/turnover-balance-sheet-and-pl/
Hi Nitin,
I am a salaried person working with a private sector company with salaried income above Rs.20L pa. Trading P&L for FY 2018-19 is as below,
1. Equity Short Term + Intraday + F&O (all instruments) : Rs.-26049/- (Loss Rs.26049/-)
2. Brokerage paid : Rs.12014/-
3. STT & other taxes : Rs.14345/-
4. Other exps (DP charges, Trading related subscriptions eg Streak etc) : Rs.6977/-
All above Total : Rs.59385/-
Questions:
1. Till last year, I was using ITR 1 for filing tax returns. Which form should I use now?
2. As understood from above posts, intraday losses can be carry forward and can not be settled against salary income. As I need to carry forward above amount to next period, do I need to declare the same now while filing ITR for FY2018-19? If yes, where is the provision to mention the same.
3. Does this need to get audited? If yes, when? This year or next year? what are the general guidelines – when audit is required / when not required.
Thanking you in advance!
Regards,
Rahul.
1. ITR3
2. Do go through the entire module and this sample ITR form.
3. Yes, go through the module.
Sir,
Before finacial year 2018- 19 I am a salary persion and fill ITR 1. In finacial year 2018 – 19, I started a small retail business and invested Rs. 122000/-. A Suplier company is deducted TDS of Rs. 750/- in my commission. This year I also open a demat account in your company and earn Rs. 8000/- as STCG. I have fixed deposits in bank and bank deducted TDS of Rs. 12000/- in my interest. I also deposited my son college fee of Rs. 133500/-.. This year my total income is approx Rs. 360000/-. I have not maintaining the accounts. Please let me know: which ITR I will file?
If it is a business, ITR3. You can show STCG on it itself.
Hi Nithin ,
There is one of my friend who has just started trading for an year and have no other income .
He has made around 500- 1000 rs profit , is it required to ITR in this case.
Regards
Vinay
hmm.. best if he does. If nothing, an ITR2, can be done on your own.
Sir, I am salaried individual employed in a private company, and zerodha user since 2017. Last two years I was using ITR form 4 for filling of taxes, as I had some intraday transactions during those year. This year I have not done any intraday transactions and I have only bought some shares via smallcase, which I am holding till now I haven’t sold anything hence have not made any profit/loss. Intra-day/speculative turnover for this year is Rs. 0
Which ITR should I file this year ?? Can I file ITR 1 this year
If you don’t have any capital gains to declare, yeah, ITR1 is enough.
Dear Nitin, first of all thanks a lot for such a nice explanation.
I have a query, I am a salaried person and fall under 5% tax slab, in 2018, I did intraday trading in stocks for which my turnover is just ₹5300/ and loss is ₹4600/ (no profit).
Also, I received short term capital gains of ₹11000/. So on stcg I have to pay 15% tax as intraday trade and short term investment can’t be combined?
Can I file itr 2 by paying 15% tax on stcg and omitting the information about intraday trading as there is no profit? Or i have to file itr-3/4 and information about intraday trading can’t be omitted?
If I file itr-4 (for carry forwarding the loss), do I need to get my account audited as turnover is lees than 2 crore and profit is less than 6%? Or in case of such a little amount (₹5300/) there is no need of audit?
Also, is the turnover given in console of zerodha accurate as required by IT department or I have to check it manually?
Thanks in advance.
1. STCG is as per the tax slab with max of 15%. So you have to pay only 5%.
2. Best to file ITR3. But since you have done so little intraday trades, maybe you can. Speak to a CA.
3. Not required to audit.
4. Turnover on the console is the most conservative approach in finding the turnover. Do double check it and you can take a different view on calculating turnover as well.
Hi Nitin, Seeking your guidance on taxation.
I’m a salaried employee with 9Lacs as ‘Income from Salary’, I’ve made a loss of 2Lacs in FNO. Till last year I used to file ITR-1 even after I had losses in trading.
This time onwards I wanted to account the trading P/L as well, could you please suggest which ITR form to file and do I require and audit based on the below data [Tax P&L generated from Zerodha]
Tax P&L Statement for FO from 2018-04-01 to 2019-03-31
Realized Profit Breakdown
Options realized profit -130159.75
Futures realized profit -78988.75
Total realized profit -209148.50
Turnover Breakdown (Scripwise)
Options turnover 1414459.00
Futures turnover 124503.75
Total Turnover 1538962.75
Unrealized Profit Breakdown
Futures realized profit 0.00
Options realized profit -3622.50
Total realized profit -3622.50
Other Debits/Credits including Service Tax
Total Charges 22046.44
Total Other Charges -306.80
Charges
Account Head Tax Amount
Brokerage – Z 7800
Central GST – Z 0
Clearing Charges – Z 189.1527
Exchange Transaction Charges – Z 2658.7712
Integrated GST – Z 1916.6263
SEBI Turnover Fees – Z 121.9049
Securities Transaction Tax – Z 4484
Stamp Duty – Z 4875.9844
State GST – Z 0
ITR3 and yeah, audit required.
Sir,
In financial year 2018-19, I am filling ITR 3. my divident income is Rs. 33 764/-.
Please let me know: What I put Rs. 33764/- or Rs. 0 as a Dividents, Gross income in the filled of ITR 3 Section Sch OS (Income from Other Sources) 1a, Dividents, Gross.
Rs 33764.
Hi Nitin,
Income from salary 25L F&N loss 7L. I am carry forwarding the losses from last 7 years. Previously filed ITR 2.
Can you guide on which ITR form and audit required?
ITR3 and yes audit required.
I am a house wife. I am dealing in future and options etc. Which ITR form should I fill return ? My total turn over only 160000 hence 6% 9600 income and gained losses through 2018-19
You could use ITR3 itself as there is no other income, you would not need any audit.
Hi nithin,
should i show total amount received as short term capital gains in itr 2 or show after deducting the charges (stt etc).
At console stt and other charges are not given for stcg, so how to check these?
STT can’t be included as cost, but everything else can. You would have to approximate the cost for STCG, from FY19/20, we have charges for capital gains and intraday separately.
I have only trades in F&O, MCX and Equity and there is no other income from salary
which form i have to choose for filing income tax return
ITR3
Hi Nithin, thanks a lot for your guidance.
in continuation to above query (Nithin Kamath says:
July 15, 2019 at 2:29 pm
1. STCG is as per the tax slab with max of 15%. So you have to pay only 5%.
2. Best to file ITR3. But since you have done so little intra-day trades, maybe you can. Speak to a CA.
3. Not required to audit.
4. Turnover on the console is the most conservative approach in finding the turnover. Do double check it and you can take a different view on calculating turnover as well.)
I have following doubts:
1): while filing ITR-3, to give information about intra-day trade, I just need to enter the information in column 65 of P&L on ITR-3 and no other section is required. And I should enter information as below:
65 (i) turnover from speculative activity : 5381
(ii) gross profit: 0
(iii) Expenditure: 4669 (amount of loos + charges)
Then net income from speculative activity (iv) would be: -4669
is it correct?
2): you told that on STCG I would pay 5% tax (as per my slab) but on entering information about STCG in column 3 of STCG section the amount is automatically going under 15% tax on section E of CG page and on CYLA-BFLA page. Can you please suggest how would it come under 5% rate?
Also in console combined charges are given for intra-day and short term profit. so how to check the charges separately so that I can deduct charges from my STCG?
Thanks once again.
I am filling ITR on my own as the amount is so little, if I get it filed by CA I would have to pay him more than what I earned 🙂 .
1. Can you check the sample https://tradingqna.com/t/sample-itr3-forms-for-fy18-19/59689
2. My bad, if you are crossing 2.5lks and then showing capital gains, it will pick up 15%. Only if you show it as business income, it will be as per the tax slab.
Dear Sir,
In ITR 3 which schedule & column should i fill for below incomes without maintain books.
1. Stock Options (may be called non-speculative)
2. Stock Intraday income
3. STCG
Console Report
Intra-day/Speculative profit 29574.40
Short-term profit -128182.55
Long-term profit -45219.15
Total realized profit -143827.30
Turnover Breakdown (Scripwise)
Intra-day/speculative turnover 31319.80
Other Debits/Credits including Service Tax
Total Charges 18067.01
Total Other Charges -4489.90
Check out the sample ITR form.
My income as follows.
1) FD interest 285000
2) STCG 35000
3)Intraday loss – 4500 (TO 42000)
4) 80C &D dedn 170000
NO tax.
Are account maintenance/tax audit reqd?
Not really.
The above query is for senior citizen. As senior citizen, the basic exemption limit is 3 lakhs. whether it is applicable or 2.5 lakhs limit only?(for tax audit purposes)
Else is it better to go or presumptive income. Anyhow next year there is no trade income for me.
Please clarify if there is no STCG,LTCG column in ITR4
NOt there
hello sir,
i am a psu employee having A salary of approx 4 lac pa/. i invest in stock but no intraday, no LTCG (as i am planning to remain invested in some stock for 3 to 4 year) only STCG in some stock of RS. 8000/-. so which itr form do i need to fill.
For any income tax related query, please feel free to contact us at [email protected].
Hi Sir
I have delivery based buy value 5,15,000 and sell value approx 4,92,000.
No Intraday, No F&O No LTCG.
making around short term 23000 LOSS. FD income of around 20000. Total income coming less than 5,00,000.
which ITR form should I be filling and I don’t want do CA audit as it is very costly.
I am not interested in carry forward any loss for future, should i declare 8% profit. Request you to suggest.
ITR2 is enough, no need of audit and all. You can show the losses in ITR2.
Sir,
I want to know that my main income is from tution but i also do trading in commodities derivatives which itr form i have to fill and under which head i have to mention trading profits.
ITR3, business income.
Sir,
If i buy one commodities future of 400000 and sell worth 405000 what will be my turnover and do i need to mention turnover in itr
CHeck the chapter on turnvoer, has been explained in detail.
Sir, thanks for the reply. I ll disclose daytrade loss of Rs.1450 under P & L . Nature of business can be left blank? Or put as investment activities 13010. I am retired and having stcg, Ltcg and FD interest.
You can put as 13010.
sir,
My intraday loss during FY18-19 is around -4000 with turnover less than 2 cr.
and Shortterm loss is -52860. LTCG is 0 .
sir which ITR form i have to fill I have salary income of RS 10 Lakhs.
Whether i need audit as i have only net losses . In case I want to carry forward both losses what would be ITR form.
Please advice
ITR3, and yes you would need an audit to carry forward the loss.
Hi Nithin,
I am a salaried person having income from FD and started trading in F&O since last year. Until last FY I was filing ITR -1.
This year, I have made net LOSS (-4K) in equity and PROFIT (1.52L) in F&O as below.
Equity
Realized Profit Breakdown
Intra-day/Speculative profit -6383.10
Short-term profit 1952.52
Long-term profit 0.00
Total realized profit -4430.58
F&O
Turnover Breakdown (Scripwise)
Intra-day/speculative turnover 8198.10
Realized Profit Breakdown
Options realized profit -45958.75
Futures realized profit 198249.60
Total realized profit 152290.85
Turnover Breakdown (Scripwise)
Options turnover 787130.00
Futures turnover 934914.60
Total Turnover 1722044.60
For F&O the net profitability comes to around 8.8% of turnover.
Questions:
1. Can I make use of Section 44AD for declaring presumptive income ?
2. Should I file ITR3 or iTR4?
Pls reply ASAP.
Thanks.
1. You can, but best avoided.
2. ITR3
Hi Nithin,
What if a person falling in 20% tax bracket, who also trades in F&O makes a profit of say 20% and to avoid maintaining books of accounts decides to declare presumptive income @ 6% (which is very low as compared to his/her actual profits)?
Is this allowed or is it a straight forward case of tax evasion and would be penalized?
Please enlighten me.
Thanks.
It is best not to do anything where taxes can be evaded, it can come back to haunt later.
Hello Nithin,
I am salaried person and I was done F&O intraday trading and had loss of Rs. 1Lakh in 2018-19.
Please advise which ITR form need to fill and how I can set this off.
ITR3. Go through all the chapters of this module.
Hi Nitin,
F&O Total realized loss : -73031.75
F&O Total Turnover : 958819.49
EQ Short-term loss -4044.30
Gross receipts from profession under 44ADA: 10,90,000 (Presumptive income : 545000/- i.e. 50% of the grass receipts).
Income from salary (after all deductions) : 25,297
After all deductions my Taxable income is : 2,93,000/- (Total tax is about Rs. 2200/-before rebate u/s 87A)
After getting rebate u/s 87A my Taxable income is : 0.0
Total Turnover is less than 25 Lakh.
My Questions are:
1. Do I need an audit ?
2. Do i need to maintain books of account.
3. Where should i show Losses (F&O and EQ)?
Looking for your reply.
Thanks
Best to get an audit and maintain the book of accounts. F&O under business income and EQ under capital gains.
I have a single transaction of intraday trading with a loss of INR 35.
and STCG of INR 1525 (profit) and have salary income. Can I apply ITR2 without showing a loss from INTRADAY or filing ITR3 is compulsory?
Yeah, ITR2 should be okay
Hi,
My intraday trading is at a loss of (₹565). My income is ₹1000000.I also have about 6000 as LTCG and 3000 as STCG. Is an audit required to file my tax?
Since intraday is such a small value, maybe you can show it under STCG in ITR2 and avoid any audit.
Sir…..please help me in choosing BUSINESS CODE in ITR 4…….Last year I choose 13010: INVESTMENT ACTIVITIES…..I am trading only in futures & options……There are also 4 MANDATORY columns in ITR 4……SUNDRY CREDITORS, INVENTORIES, SUNDRY DEBTORS & CASH-IN-HAND….what should I fill in these columns???
You can use the same code. Filling of ITR, best to consult a CA. Check out this sample ITR form.
Hi Nitin,
Do we need to declare our PPF interest every year in Exempt Income, if Yes which section it should be under?
There are two below section I have found.
10(11) Statuory provident fund received
10(12) Recognized provident fund received.
Which one need to select for yearly PPF interest credited in our account.
Appreciate your help on this.
Thanks
Kumar P
Yes under EI Schedule under others. It’s Exempt U/s 10(15)
PSU Employee with 17 lakhs Gross salary. Trade mainly in F&O segment(99%). Having Loss of 4.5 lakhs in F&O segment. Want to carry forward losses. Which ITR form is suitable for me.
Net Buy Value Of Options 10534232.19 & Net Sell Value 10128800.06. + Brokrages &taxes around 36000.
ITR3
Hi, can you pls clarify on tax applicable if one is trading in options.
As option trading is considered as speculative income,one need to file itr3 return even though one is a salaried person.
Also I have read that if the annual turnover is more than 3crore rupees which includes profit+losses+ traded value. one need to get his account audited.
So can pls clarify the facts
Thanks in advance
Venkat
Can you go through this entire module, explained in detail. Option trading is non-speculative business income, you have to add the profit to your salary and pay tax as per tax slab, and yes ITR3, and audit required over Rs 2 crore turnover. But this is not contract turnover, check the chapter on turnover.
I have intra day losses of 19000 in equity with a turn over of 140000 can i show 6% profit under section 44 AD on 140000 in ITR 3 to avoid audit for AY 2019-20
You could, do consult a CA.
Hi Nithin Ji,
I am drawing 8lakh as salary and I have loss of 5 lakh in MCX Trading in FY 2018-19 and also 3 lakh in FY 2017-18 .I filed ITR 3 for AY 2018-19 .So How can I carry forward previous loss as well as fresh loss of 5 lakh for the AY 2019-20
TIA
Praveenkumar
Hmm.. if you carried forward the previous loss when you filed, this year’s loss gets added and you can carry that forward.
First of all thank you for your guidance really appreciate it. I am a private salaried person with an annual income of 3.7 lac. I also have Long term share investments in my Demat account. I made a Loss of 55k in one long term position which i recently exited. Apart from this i have 2 FD’s from which i got interest of around 1.1lac and TDS of 11.2k was deducted. Which ITR form do i need to fill and do i need audit? Also can i carry forward the loss i made in long term position? If yes how to carry forward this loss i made?
ITR2, no need for any audit for investment/capital gains. Yeah, you can now since on long term gain above 1lk there is 10% tax. This could be carried forward and setoff in the future if you have a gain above 1lk in LTCG any year.
Hi Nithin,
I have no salary income.
Interest Income: 55 Thousand
F&O Loss: 3 Lakhs
I am maintaining my own P&L and Balance Sheets as per your direction 🙂
While filing IT3, for the question – “Are you liable to maintain accounts as per section 44AA? ” – Should I be answering Yes or No?
Please advise.
If no other income and if your positive turnover is less than 10lks, no. If not, yes.
For any income tax-related query, please feel free to contact us at [email protected].
Hello Sir
I am salaried person having more than 10 Lac taxable salary. I have some short term capital gains, some LTCG and Intraday loss of less than Rs 10000 with turnover is 1 lac from last few years.
I used to file ITR2 from 2013 for above said trading not showing intraday loss.
Should i change my ITR form. If yes than which one.
Yea, use ITR3 to show your intraday trading income. If only STCG/LTCG than ITR2 is enough.
Actually I incurred loss every in intraday that also less than ten thousand what should be in that case , ITR2 or ITR3 , if i dont want to carry forward losses.
Ideally ITR3.
Sir,
I am a PSU employee.I have done some intraday trading for few times because of lack of information. Now I came to know from some internet site that PSU employee cannot do trading after which i have completely stopped intraday. will it create some problem as i have done it due to lack of knowledge.
1. Intraday loss= 924.15
2. Intraday turnover = 4201.55
3. Short term profit= 4951.55
B) Which itr form i should use ITR 2 or ITR 3?
C) what i am a trader or invester?
Since turnover is so less, you can maybe just use ITR2. Show as investor itself. But do consult a CA.
Dear Nithin,
I have been using ITR4 since it gives me the benefit of using presumptive income declaration.
But I am also a Director in one company now, so it seems I cannot use ITR4. Need some clarity on the following:
If I use ITR3, can I still use presumptive scheme to declare income from F&O ?
You could show profits more than 6% of turnover if you are trying to avoid an audit. But do speak to a CA.
Sir
Below is my PnL
Intraday profit : 1.2k
Short term realized profit : 1k
Intraday turnover : 1.65k
Futures profit : -46.19k
Total charges : 2.6k
Futures turnover : 46.18k
Which IT shoud l fill and is there a requirement for audit, I am a salaried professional with 12 lpa
Regards
Karthik
ITR3 and yeah, best to get an audit done.
Hello.
I am a recent graduate and yet to work full time. I wanted to start understanding the markets and invest. So if I make any STCG, should I file ITR or not, as I do not earn yet. If yes, whats the tax rate/ tax bracket?
Regards,
Rohit
Only if you earn more than 2.5lks do you have to pay taxes. If not no. It is always best file ITR if you have any income, even if not taxable.
Hi Nithin / Karthik,
you guys have done brilliant job with such advanced yet simple zerodha kite and all the additional features.
Also, this Varsity has become an institute itself.
i have gone through the modules but still not clear about my tax filing so putting my case for your advise
1. Salaried and in 30% bracket
2. did blow my account in F&O trade
3. Turn over 45L , Loss 10L
4. Want to carry forward the losses for sure
so if i understand correctly, need to file ITR3 and show the losses
big question here if i have to get full audit done by a CA?
6% condition is only profit or its profit/loss both
getting tax audit seems painful so your inputs will be of great help
Yeah, you would need ITR3 and audit. Audit for someone like you isn’t a big deal, quite simple it will be. You can reach out https://quicko.com/, we will announce a partnership very soon.
Hello Nitin/Karthik,
PFB my snapshot of income/losses for FY 2018-04-01 to 2019-03-31
Income from Salary FY 18-19 : 10,00,000
Other income (FD/SB Intr) : 2,00,000
Tax P&L Statement for EQ:
Realized Profit Breakdown:-
Intra-day/Speculative profit : 0.00
Short-term profit : 3100.00
Long-term profit : 0.00
Total realized profit : 3100.00
Tax P&L Statement for FO: (just did one transaction in the month of Mar 2019 to try options)
Realized Profit Breakdown
Options realized profit : -14400.00
Futures realized profit : 0.00
Total realized profit : -14400.00
Turnover Breakdown (Scripwise):
Options turnover : 14400.00
Futures turnover : 0.00
Total Turnover : 14400.00
Questions:
1) Though one transaction since I had done FnO I believe I had to go with ITR-3 or ITR-4 (presumptive). Please confirm the best option/ITR.
2) My short term captain gain of Rs 3,100 is part of buy back (again I wanted to try how buyback works) so the intent is to clearly make quick profit. Avg Buy at Rs 2,400 and Avg Sell at Rs 5,500 (just 1 quantity accepted in the tender offer). Can I combine with FnO as part of non-speculative business income?
3) To combine STCG to FnO head how would I calculate the turnover? I believe from Varsity content it should be absolute profit, thus, it should be Rs 3,100. Or, should I have to go with Avg Sell * Qty + profit (5500*1 + 3100) = Rs 8,600 as turn over?
4) If I go with only FnO losses, obviously, 0/14400 = 0, which is less than 8% of profit to turnover. Does audit applicable in this case, say, filing ITR3?
5) If I go with FnO losses and STCG combined then 3100/(14400+8600)% = 13.48%, which is greater than 8% of profit to turnover. Does audit still applicable in this case, say, filing ITR3?
6) This is the most confusing for me: everyone talks about maintain book of accounts and I thought Zerodha is already maintaining my trading account. I do not have other business so please clarify what content/document need to be maintained as part of “book of account”? (I can maintain my own excel sheets, if really needed.)
Thanks & Regards,
Harikumar J.
P.S: I had lot of e-mails/calls to support team and had, rather, disappointing experience with your support team. Out of respect for you guys and Varsity I enrolled in Zerodha and do active trading. I hope I get some answers. BTW I did consult auditors but, you know, they have different views. I just want to do things right. BTW GTT is great!
1. Since it is just one trade (FO), maybe you could just show this under short term capital losses. Do speak to your CA. But yeah, ITR3.
2. Yes
3. Rs 3100
4. Yeah, but you could potentially show a profit to avoid the audit. If you show as STCL, you wouldn’t need.
5. No audit. Btw, you can just show 8% of your FO turnover as profit and avoid audit as well.
6. For all your trading related, you have the book of accounts maintained. You just have to maintain for all your other expenses from your bank account. Quite simple this is.
I have past losses, some of which I set-off last year and carried forward remaining.
This year if I file u/s 44AD using ITR4, will I be allowed to carry forward the past losses? Can I set-off current profit with past losses?
Can I continue to set-off and carry forward for next 5 years u/s 44AD using ITR4?
Ah no, you will need to use ITR3.
Hi Nithin,
In one of your comments you have mentioned that for the ITR returns and audit you’d be partnering up with quicko.
When can this announcement be expected, any chance before this year IT returns deadline 🙂 ?
-Ravikiran
https://zerodha.quicko.com/ 🙂
Hello Nithin Sir ! When will bracket orders and cover orders types will be enabled in sentinel baskets
Hmm.. not really planned to have basket for CO and BO. These order types put a lot more stress on our systems than normal orders, so giving baskets of these will be tough.
Thank you so much, Nithin! I had spoke to three different auditors/firms and each of their take on turnover calculation and subsequent audit requirements are contradicting. I guess none have clear clue when comes to stock trading! I thought to go to source Income tax department to clarify, thus, called Aaykar Sampark Kendra many and times and none picked up 🙁 CBDT should really need to append sub section(s) to 44AB w.r.t share trading.
I guess I would have to take some chances here…Nonetheless, your reply provided some clarity and really appreciate it.
Thanks Nitin.
I will use ITR3 for F/O business. But can I include the other business (wholesale of medicine) u/s 44AD in the same ITR3 and setoff the past losses of F/O against income from medicine business this year ?
regards
Sumit
In the same year, F&O loss can be set off against other business income. But if it is carried forward, it can be setoff only against any F&O gain in the future.
sir,
I have a short term loss of Rs 2500 and intraday profit of Rs 7500 . my turn over is around 20k and i am a govt employee.usually i used to file ITR 1 . now i understand that i have to file ITR 3 as i did intraday for the last FY. is there any option to file ITR 2 with above details ?.Is there any other issue about filing ITR3 by a govt employee. (as it is for business persons)..? pls do reply ,thnx in adavance
Since turnover is less for intraday, you could use ITR2 and show intraday a short term gain. Do speak to a CA.
Hi Nithin,
After reading the varsity about Taxation, I am aware of the separations of Capital Gain/Business Income.
I am working as a software developer. And trading (intraday, short term) and also F&O.
So, I know that my trades come under STCG since I am trading in short term. But since I trade often I am willing to keep it under Non-speculative capital gain along with F&O.
Intraday Cash-Segment is anyhow treated as intraday(Speculative). This is what overall I got from this taxation module.
But, the problem is, I downloaded Form-3 and I see 50 excel Sheets available. I started filling those sheets, but got struck multiple times. So, I found it real difficult at some parts, so went to varsity “Tax P&L” and went to H&R Block. They are asking 4,300 Rs for my income tax return. I didn’t really feel good about this.
So, since you people are aware of the Form-3 more than us since you are filling it(or some other form related to trading) since you started trading, why don’t someone in your team help us by recording a video for each sheet in form-3 excel.
While doing that, you can refer to the concepts discussed in this module and also help thousands of traders fill their income tax by
their own. Thanks in advance.
Thanks
Srikrishna
Supporting tax filing is quite tough. You can check out https://zerodha.quicko.com/
Hi Nithin,
kudos to you and your team for such a wonderful module and continues reply.
Need Help on my below mention query :-
I have other Income of : 2.8 Lakhs.
speculative Intraday Profit equity : 1.2 lakhs
LTCG property- : 6.5 lakhs
STCL Loss equity – : 7 LAC
non speculative F&O Loss : 3 Lakhs
Well i am maintaining my bank books & balance sheet in excel with me.
So my question is do need to go for audit? as all put together i am in loss and or below the minimum tax slab. I want to set off and carry forward my loss. Pls tell me wat is best way to file my ITR
1. Which forms to use for Filing?
2. Is Audit required?
Technically you can avoid an audit, but it is best to get it done, shouldn’t cost much for just this much activity. Use ITR3.
Dear sir,
my salary is 7L pa and i have done intraday trading with turnover of 2.74L.I made a loss of 70k (40 + 30k taxes).My Qns are…
1.which ITR to file.
2. Am i applicable for tax auditing.
3.what are the consequences if i file ITR 1 by not disclosing trading totally as i have only incurred losses.
1. ITR3
2. Yeah, best to.
3. If you don’t declare, you can possibly get a scrutiny notice asking why you haven’t filed.
Dear nithin sir,
pls hlp me, i startd my trading with zerodha & has short term capital loss, being frm a small town dnt hav a ca nearby so filing itr frm a lawyer who i thnk doesnt have much knwldge of filing capital gains, i wnt to file my trading loss but he is asking fr isin code for my f&o contracts, pls tell me whethr script wise entry is done fr stcg or cn i file consolidated loss, & if script wise entry required whr cn i find isin code.pls hlp me sir last date is nearby i am salaried with 3.6 lac p.a income..
From this year, scrip wise is required. Scrip wise is already available on our Tax P&L. ISIN for the scrip can be found on nseindia.com or Bseindia.com. we will soon have the ISIN along with scrip code on tax P&L on console.
Hi Nithin,
I trade only thru Zerodha. Incase my turnover increases in future and I need to get my accounts audited , does Zerodha provide this facility
regards
Can you go through all the chapters in this module? I have explained when an audit is required.
after googling i have realised that ,while filing itr3 with speculative income only the item no 65 in P&L is to be filled . Am i correct? (taxable income is there and my case is more than 6% profit-ie no audit case).
Yes, this column is for speculative profits and losses. If you classify under this, you can’t offset against any other business gain.
1)I have salary income of Rs 8lakhs ,
2) Short term loss of Rs 8000/-
3) intraday loss of Rs 20000/-
4) charges including GST Rs 33000/-
5) other charges 2500/-
Please advice on the following
1) which ITR form shall I use to file my return( to include both salary and trading losses)?
2) How can I carry forward my losses?
3) How to treat the charges and whether the charges can be treated as loss for carry forward??
1. ITR3
2. Yes
3. Yeah you can add charges to your loss and carry forward.
Thanks Nitin,
Are you sure, my CA had set off past losses of F/o against gains from other business (wholesale of medicine) last year as well.
Sumit
Hmm.. won’t be able to commit on what your CA has filed.
Ques 1. I am Private Salary Person with 5 Lac per annum, I do Intraday, Short Term & F&O which IT Return should i fill ?
Ques 2. As i am in Short Term gain for Rs. 17,656 & In F&O Loss for Rs. -1,17,010, Audit is mandatory in my case or Not ?
1. ITR3
2. Yeah, best to get it done.
Sir, I am private sector salaried person and I do intraday/delivery trading. I have loss in my trading. What ITR form I have to submit?
I am confused between ITR2 and ITR3. As this chapter says ITR2 is for salaried person with no business and ITR3 is for salaried person with business. I do trading for investment and not for business, and I saw couple of your reply suggest to file ITR3 for salaried person. Can you help me understand the correct ITR form for me?
If you do intraday trading, it has to be shown as business income. So you will need to use ITR3.
Hi
I am a salaried employee income >50 L.
I have invested in PMS as well as mutual funds & equity and there has been short term losses as well as LTCG apart from losses from PMS around 3 lakhs.
Please let me know
1. Wether I should fill up ITR-3?
2. If yes what nature of business should I fill in ITR 3?
ITR2 if you don’t have any business income (intraday or F&O trading)
Hi Sir,
I am a housewife and don’t have any other income. I am doing trading past one year and still, I have not earned any money(only loss-30000) including intraday, Delivery & F&O and total turnover is less than 2Cr. My profit & loss is less than 2.5lac, which don’t come under the income tax slab. Do I need to file income tax return & do the audit? Please help.
Do file the ITR, audit could be avoided.
Hi,
I have losses from intraday and long term and profit in f&o. I’m a salaried employee as well. As you have suggested to many above, I think I should also go with ITR3 right..
Regarding the audit trial, are the details from daily margin statement and console tax p&l statement from zerodha sufficient or should we maintain any other logs for the audits?
Thanks
That is sufficient, just keep a bank book of sorts, details of all your expenditure that you intend to show for your trading business.
I have no income . But I am doing interaday equity cash trading. which ITR form to be used
ITR3
I have income from other business as 3.5 lakhs(presumptive income) and f&o loss at 1.3 lakhs. Do i need audit .also which form to fill as i dont have any p&l and books of account for other business. Can i show my other business income in itr 4 as premptive and f&o loss in itr 3.
You can use only ITR, you will have to use ITR3.
Where do i show dividend received from shares in ITR 2? “Income from other sources” schedule or “Exempt Income” schedule??
If More than 10 Lacs than Income from other sources Schedule OS of ITR Point No 10 and Less than 10 Lac then Schedule EI Point No 2
Hi Sir,
My Annual net income 4.95 lakh
Intraday profit -2461(loss)
Short term trades profit -36421(loss)
1) Which ITR form i need to submit ?
2) Also is there any provision of uploading zerodha P/L report directly in to cleartax instaed of adding all stock details manually in cleartax template ?
1. ITR3.
2. Currently, there is no way to do this directly.
Hello nithinji,
can you please let us know as to which Nature of Business (Code) to specify in ITR-3 if there is loss from Intra-Trade in equities?
Thanks in advance.
You could use 13010
Hi Karthik,
Assume that I earned 5 lakhs profit in trading and paid income tax for this. If I want to donate this money to either brother or wife, Will it be considered as their income and do they also need to pay tax ?
Thanks
Satya.
To immediate family, you can give it as a gift, not taxable in their hands.
sir, I have no other source of income. i have gained 20000 rs in 6 months by doing intraday trading. do i need to file any tax? or i have to file for any sort of ITR form?
Can you explain how the taxation works.
No taxes to be paid and filing returns isn’t mandatory as well, but advisable. To know how taxation works, do go through this entire module.
Tax P/L is very useful report. But how to get opening and closing balances of cash and stocks for a FY?
For cash you can check for fund statement, change the dates to start and end of the year. For holdings, you can go to holdings and do the same.
https://console.zerodha.com/portfolio/holdings
https://console.zerodha.com/funds/statement
Hello,
If turnover is profits plus losses plus premium if any.
Then how to get the Profit or loss, while preparing P&L Account? What will be the value of purchases to be shown?
hmm.. didn’t get the question. Can you go through all chapters in this module.
Hi Nitin, I am a salaried person. Last 2 year I had loss in FnO & filled the return using ITR3 and carried my lossed. If there is no trade in this year, do I need to get audited and can I fill ITR1?
You can use ITR1, no need of audit.
Thanks for the input
Hello,
How can we prepare Trading Account for F&O trading as per income tax?
How would be calculate Purchase, since turnover is Profit + Loss? How can we get gross profit/loss and then net profit/loss?
Or we just need to prepare the P&L Account showing income/loss directly in P&L account and then debiting the expenses incurred?
Can you go through the entire module.
Sir
Can I know the reason behind auditing in section 44AD.
I think this is demoralizing for a loss making business ,which increases its loss further either through auditing fees or increase in tax due to presumptive income as explained in example.
Or is there any logical reason behind auditing in section 44AD.
The issue is that most people trying to evade paying taxes by showing losses. Rules are made to cover the bad actors in society, ends up hurting the good ones more.
Hello,
Received a credit entry in my bank account with particulars ” NEFT – Zerodha NSE Client AC – Date XXXXXXXXXXXXXX HDE.
Can you please explain this transaction.
sir
i have filed ITR3 ,but till now it is not processed ,is it an issue ?
Hello,
Sir I’m FNO trader and my turnover is 40 lacs, so can I file ITR 4 under presumptive scheme and avoid audit?
Waiting for your reply..
Once the ITR has been verified by the individual, the income tax department starts processing the ITR. The Central Processing Centre, where your tax return is processed takes normally a few months time to process. Income tax department has to process the ITR within the expiry of one year from the end of the financial year in which return was filed. Therefore, for the return filed for FY 2018-19 must be processed by March 31, 2021. So yeah, the Upper Limit is March 31, 2021.
You can, but if you have any loss you will be letting go of it.
Hi Nithin,
I have no salary income.
Interest Income: 50 Thousand
F&O Loss: 3 Lakhs ; Turnover is 11 Lakhs
I need to carry forward my losses. Do I need to get Tax Audit done?
Please advise.
Since your total income is not taxable, you wouldn’t need an audit. But do consult a CA.
sir
In ITR3 how i can specify(ie by which option or part of itr), that i want to declare stcg as non speculative business income .
thankyou sir
You just have to mention it under the business income section. For tax filing best to take CA help. Check this: https://zerodha.quicko.com/
supposed I earned Rs 10,00,000 profit as short term capital gain from share market. I am not a salaried person and don’t have any other income. Now my questions is: a) Which ITR Form should I use while filing my ITR. b) Is there any provision of exemption like upto 250000/- nit tax, adjustment of House Rent paid and investments/ tuition fees etc.
1. ITR2
2. Yes, you have to combine this income with all your other income and then pay tax as per your IT slab. Best to consult a CA.
I m centeral government employee my income is 900000 for 2019-20 and I have an trading account in zerodha and I have loss 150000 in 2019-20 in trading intraday and delivery, what ITR form used by me and please tell me last date of ITR filling
ITR3, check this https://zerodha.quicko.com/
Hi Nitin ,
I am engaged in manufacturing business and have my balance sheet audited every year. During this year my shares trading turnover is more than 2 cr limit .
Do i need to file trading return separately or it can be done with me regular audit return.
Apart from these i have speculative loss (intraday) of 1lakhs and non speculative loss of 2 lakhs. Can i adjust it against my profits from manufacturing business this year and if loss cannot be adjusted fully can i carry it forward.
Can we also claim STT charges and other charges which we paid during trading.
Thanks
You can include trading within your regular audit return. And yes, you can set off the loss. Yeah, you can show all your charges as cost of trading.
I m house wife
have no salary income.
F&O trading profit: 5.5 lakh
which ITR file?
Do in need any audit?
what shall be nature of business in ITR 4
ITR3. 130010 – Financial Intermediation/Investment activities.Audit is required only if profit less than 6% of turnover.
Sir i borrow all money from relative and my loss is equity -31.9 k ,currency -2.01 Lack,option -2.7 L ,. Turnover 35.94 k , currency 31.47 L ,option 1.34 cr so i am audited? Which it return I fill? I m housewife no other income ..plz help me
If housewife and no other income, you don’t need an audit. But make sure to file ITR. Check this if you need help https://zerodha.quicko.com/
Thx sir so much for reply…if turnover cross 2 cr and also in loss then audit requre or not? quicko pe detail fill kiya but no answe after 5 days
More than 2 crores, best to get audited. But do check the definition of turnover in the chapter on turnover (it isn’t contract turnover)
my income is around 2 lakh annually from debt fund can i file itr 4
If your total income is 2lks, u don’t need to file an ITR. Even if you do, ITR2 is enough.
business income – 2 lakh
profit from shares – 20000
profit form debt funds – 2 lakh
house rent – 60000
can i file itr 4 if presumed income my income 4,80,000
as filing itr 3 is very difficult task
If profit from shares is speculative business income, then no you can’t use ITR4. But otherwise yeah. You can check this for tax filing: https://zerodha.quicko.com/
Hello Sir, We are an LLP firm incorporated in the year 2019. Stated operation from 1st April 2019. Please guide on how to calculate advance tax for an LLP.
Do go through all the chapters of taxation module, have explained everything. Btw, to calculate advance tax you need to estimate your yearly income and then pay taxes for that at end of every quarter.
Long Term Capital Gains 120000 after indexation (debt Funds)
FD interest income 200000
Loss from F&O 325000
Loss from Shares 125000
Can I set off my losses from my income?
Kindly clarify?
Interest income can be adjusted against business loss (F&O)
if i made profit through intraday trading and profit is in demat account only. I didn’t transferred money from demat account to my bank account. In this situation do i need to pay tax if money is in demat account?
Yes, you have to pay tax on all realized profit. Even if it is in the trading account.
Hi Nithin sir, I am new to stock market and didn’t know that intraday comes under speculative business…. I downloaded P&L Tax report from Zerodha showing scripwise turnover of 52k with intraday loss of 45k and STCG loss of 3.5k… I don’t wish to carry forward the intraday losses in future as I am no more interested in intraday trading (just long term shareholding is my target)… Moreover, I am a salaried employee and my net taxable income is around 2L only…
1) Do I need to file ITR1 or ITR2 or ITR3 or ITR4? For the past two years I filed ITR1 as I was not involved in stock market…
2) Do I need tax audit?
I would not have ventured into intraday had I known earlier that it is speculative because it is not possible for a 9-5 employee to do so…. Please clarify as it is rendering me sleepless… Thank you
1. Best to file ITR3.
2. Not really.
You don’t have to be worried about this. You can take help of https://zerodha.quicko.com/ to file your ITR.
Hi Nithin Sir
I started stock markets since this january.
I only have short term capital losses, realized (no intraday trading, no f&o trading)
My queries:
1. I fill ITR-2, right? (I am salaried)
2. Do i include the charges (payment gateway charges, DP charges, STT etc.) in my short term capital losses, or is it just the losses from stocks?
3. Can these losses be offset against savings account/FD accounts interests?
Thank you.
1. Yes
2. You can include the charges. Best to speak to a CA to help you file this properly. Check https://zerodha.quicko.com/
3. No.
HI, I dont have any Salary income and i only have Income through Trading – Please let me know what is the form i need to use and also if i dont incur any profits in financial year do i need to file taxes ?
ITR3
Please let me know what the form is?
AA?
Hey, I have been trading since August 2019. I have net losses of around 4 Lakhs (EQ and FNO both). I have no other income source, in fact I am still a student. And the money which I had was given to me by my father. Do I have to file for ITR?
P.S. This is my first year of trading.
Yeah, best to file the ITR. You wouldn’t need an audit and all.
If i want to pay tax on capital gains(short & long term) only , and dont want to include it in business income.
You can. Go through the entire module, I have explained.
Nithin,
Thank you, simple & nice presentation… but powerful!!
Hi Nithin,
Thanks for all the information on taxes.
A li’l offtopic but is there a provision yet to account for the ‘cryptocurrency’ gains/losses in ITR. I do have some losses from there and was wondering if I could declare them to offset taxes from my salary.
Thanks!
Best to show it under speculative income/losses.
Sir, I am a salaried person having annual income of 4,50,000. I Am also having STCG of 3900 and non speculative loss of -7500 with turn over of 150000. So my questions are :-
1. Which ITR form to fill?
2. Whether audit is required?
3. Do i require the help of CA?
1. ITR3
2. If your speculative turnover is less maybe u can combine this with your STCG.
3. Yeah, best to speak to a CA check this https://zerodha.quicko.com/
Hello Nitin,
1) Can i square off gains from mutual funds with losses in FNO?
2) I have mix of FNO trading, intraday, at expiry and in between. How to segregate each for tax calculation?
3) Kindly append the chapter with current tax structure and ITR needs.
1. No
2. You can look at our tax P&L on https://console.zerodha.com/
3. Nothing much has really changed
I am pensioner and have following income
1 pension —425000
2 fd interest —-856000
3 ltcg shares —99580
4 stcg —8500
5 intraday shares —-2450 (LOSS)
6 TURNOVER shares 47.50 lacs delivery base
Shares ltcg and ltcg
Please tell which form to be used and requirement of AUDIT for AY 2020–2021
ITR3 needs to be used. Since intraday turnover is quite less, you can avoid audit. You can reach out to https://zerodha.quicko.com/ for help.
hey nitin
In the section 7.2 you wrote “ITR 4 (ITR 4S earlier) – this is similar to ITR4 but with a presumptive scheme” hear it is ITR4 OR ITR3 Kindly rectify it.
Thanks
ARUN
please tell me whether intraday trading in commodity market is speculative business or non-speculative business.
Non-speculative. Check out all the chapters in this module.
Hi Nithin Sir.
I had a one question.
My annual income is below 4lkhs and I had not filed income tax nor I had payed any income tax upto now. I started investing in stock market through zerodha from March 2020 and I’m taking only delivery positions and had a plan to invest upto 5lkhs for a very long time like 15+ yrs.
Since I’m a beginner and had not much idea about all this, So I want to know Sir do I had to filled income tax and pay tax every year or I just have to pay tax whenever I booked profits?
I hope Nithin Sir u will clear my doubts.
Thank u
You have to pay taxes at the end of the year on overall profits. Make sure to go through all chapters of this module, explained in detail.
Hello Sir,
I have salary income of 7.1 lakhs and with this I have incurred F&O losses of 6500 Rs. with total F&O turnover of 2.82 lakhs. With this I have long term mutual fund profit of 8500 Rs. I have following questions:
1. Should I take benefit of presumptive tax benefit as my total turnover is less?
2. Is there any tax on my long term mutual fund profits ?
3. Which ITR should be applicable in this case?
1. You could.
2. No, 0 tax for lesser than 1 lk LTCG.
3. ITR3 ideally.
Hi Zerodha,
I’m an NRI, based on Zerodha’s Tax P&L, I have got STCG of Rs 50,000 for FY 2019-20. Should i need to declare CG as Rs 50,000 (which i believe just the difference of sale price to purchase price) or should need to consider Cost of Acquisition (COG) of shares (like paying brokerage, gst, exchange fee, PIS bank charges, PIS transaction charges by bank etc -except STT) and same fees during sale of the same shares into consideration as well? If so, where can I retrieve this report form Zerodha?
Regards,
Krishna
Hi Sir,
I am not salaried/no business and no other income, trading at Zerodha for last one year & never filed ITR.
I have made loss in intraday trading and few delivery based short term trades.
Intra-day/Speculative loss – 3.14 Lk
Short-term loss – 2 Lk
Total Charges – 3.4 Lk
Intra-day/speculative turnover – 6 Lk
1. Which ITR form to fill ?
2. Whether audit is required to carry forward since no tax liability ?
3. How can quicko help me ?
1. ITR3.
2. Not needed.
3. U have to call them.
Hi,
I had a couple of doubts. Can you please guide me?
Last FY, I had salary from internship(around 65k), Short term capital gain of around Rs.1000, intra-day loss of Rs. 300, income from taking tuitions of kids at home(about 55k).
So, my doubts are-
1. If i should use ITR 3 or ITR 4?
2. Do I have to pay tax on STCG of 15% or I don’t have to since my total income is way less than lowest tax slab limit
1. ITR3
2. You don’t have to since total income is less than lowest slab.
hi nitin
i fills the ITR4, as i do intra-day and cannot maintain books. i want to know that DEBT FUND GAINS to be shown as income from other sources or should be calculated as turnover with 6% tax.
please help me
amit
Hmm.. I don’t think you can use ITR4. You can reach out to https://zerodha.quicko.com/ for tax filing help.
Hii sir,
I am a salaried employee and my firm pays taxes on behalf of me and acknowledges me with form 16. I want to know how do i declare my intraday trading profits there and can i fill itr 3 separately for my intrady trading as they must be filing itr 2
You can file ITR3 separately including your salary and trading income. I am guessing your company would be deducting your taxes and paying, not filing your ITR.
Yes sir you are right i enquired in my office and found the same thank you very much this made many of my doubts clear
Sir,
I had been earning interest from Bank FD only and submitting ITR-I upto the financial year 2018-19.
Now I invested some of my savings in equity market and the rest in Bank FD from the financial year 2019-20.
For the financial year 2019-20:
1. I have incurred a loss of Rs.-637281.82 short term in equity trading(non speculative:-637281.82)
2. I have a speculative income of Rs.62461.36
3. I made interest income of Rs.163000/- from Bank FD
Please advise me which ITR form should I submit for the financial year 2019-20 to carry forward loss to the next financial years.
ITR3
I am working at shop and getting salary 1,20,000 per annum in cash . If I earn profit 50000 in 1 year ( short tem and long term) what would be tax on capital gain and which ITR i have to fill???
No capital gain. You have to pay taxes only if your total income is taxable. ITR2.
Hi Sir,
I am working abroad so my income is tax free i made a loss in trading so do i need a audit or not. And also please let me know which ITR form should i use. To my knowledge i need to use ITR-3.
ITR3, if you have no income, then you can avoid audit.
Hi Nithin ,
I have income from other sources (4.5 lakh) , I have F&O loss of 4.5 lakh , I file ITR3 ,
Now question is : Is it mandatory to offset my F&O loss with my non-salary income ? Or Is there a option that I can carry forward the loss ? (If option is available how to do it in ITR3 ??)
Because on 4.5 lakh income i will pay negligible tax currently , If I carry forward loss and make equivalent profit next year , I will be able to take offset , Otherwise next year if i make 4.5 lakh profit my tax liability will be big.
You will have to mandatory offset, not possible otherwise.
Dear sir,
For FY 2018-19 I filled ITR for business income with audited by CA. now for FY 2019-20 can I file my ITR as income with capital gain only? I heard it the government had declared that all of us have to declare one time whether we have a business or capital gain income, is there anything like this. thanks
You can show capital gain only this year, there shouldn’t be an issue. But do speak to a CA, you check this https://zerodha.quicko.com/
Hi Sir,
My main income is from youtube., which would be less that 1 lakh/year. So i thought of filing it as business income under ITR4 . But also I have bought some equity shares which is altogether less than 7K, and also have ELSS.
In this case, should I file ITR4 or ITR3?
You can file ITR4, btw, filing ITR is not mandatory for you.
Sir,
I have salary of Rs 10,00,000/- P.A. and do delivery based equity trading to earn short term gains ( less than 12 months ) of around 250000/- in a year also there is INR 50000 FD Interest earnings. Please suggest the ITR from to be used for filing for F.Y. 2019-2020. Request your advise.
Regards,
ITR2
Sir,
I have pension of Rs 6,00,000/- P.A. and do delivery based equity trading to earn short term gains ( less than 12 months ) of around 2,00,000/- in a year also there is INR 50000 FD Interest earnings. Please suggest the ITR from to be used for filing for F.Y. 2019-2020. Request your advise.
Regards,
ITR2
Sir, I have salary income of 8 lakh/yr.
1. Additionally I have income (PROFIT) from (Currency+F&O+Commodity) is 2500, with turnover 55000.
2. Short term realized LOSS from mutual fund 4680. Which ITR I need to file for AY 2020-2021 ? Any need for audit ?
Thanks in advance.
ITR3. No need of an audit.
Hi Nitin,
I have a STCG of Rs 5 lacs as on today, and I am planning to reinvest the entire amount of STCG on shares again for long term. Am I liable to pay tax on 5 lacs now?
Thanks in advance.
Regards
Yes
I am a trader with
Intraday Loss 97000
Delivery short term gain 30000
Long term gain -2500
Which type of ITR form should I fill?
In which head I can show my Intraday loss?
Please revert.
Thanks in Advance
Regards,
Anup K
ITR3. For tax filling help, you can reach out to https://zerodha.quicko.com/
Sir I have a loss of 20000 including both speculative and non speculative for financial year 2019/20.And I don’t have any other income for the year,which ITR form should I use to carry forward the losses.And I should file ITR by 31st of this month right if audit is not required.
ITR3, due date extended to 30th Nov this year.
Hi Sri Nithin Sir,
A fan of ur Platform….
I came to know about the ruling on the need of tax audit only today..Being a salaried psu employee, i hv been filing only itr 1 for past 3 years…
In fy 19-20, I Have around 8 lakh salaried income, ₹420 speculative income from a turnover of ₹24000, ₹3500 stcg profit and minus ₹13000 ltcg loss(negative)…
Having read many articles, I came to know that i can file either itr 3 or itr 4…
My question is that,1-> whether i can file itr 3 without tax audit by showing presumptive income greater than 6% as i wish to carry forward my ltcg loss….or 2-> only itr 4 option is left if tax audit is to be avoided…
Hi Anees,
You should file ITR 3.
1. Rs 8 lakh salaried income.
2. Rs 420 speculative income from a turnover of ₹24000.
3. Rs 3500 stcg profit and minus ₹13000 ltcg loss(negative).
Contd…
You can carry forward the long term loss of Rs 13K for future years which you can set off with long term capital gains earned in future years.
Hi Nithin! Thanks for sharing this wonderful information with us.
I suggest you to start providing services for ITR filing to your clients (like cleartax) which would auto populate the gains/ losses from Zerodha A/c to that e-filing software. This will help you to expand and helps retail investors like us to get rid of these compliances.
Have you checked https://zerodha.quicko.com/
Can we show presumptive income in itr 3
Hi Anees
Can we show presumptive income in itr 3 – Yes, you can show presumptive income in ITR3.
Refer Schedule P&L.
Hi
anyone please help
I am salaried govt employee with Rs 7.5L per year
I have traded in year 19-20 with details
Intraday profit -42.7 Short term realized profit -18.25 Long term realized profit 0
Intraday turnover 377.3 Total charges 178.15
so can I file itr 1 without forwarding loss or itr 2 as capital gains or can I to file itr 3 as unaudited
thank you for your kind help
Hi
anyone please help
I am salaried govt employee with Rs 7.5L per year
I have traded in year 19-20 with details
Intraday profit -42.7 Short term realized profit -18.25 Long term realized profit 0
Intraday turnover 377.3 Total charges 178.15
so can I file itr 1 without forwarding loss or itr 2 as capital gains or can I to file itr 3 as unaudited
thank you for your kind help
File ITR 3 disclosing all the incomes.
Since the turnovers are so less, maybe just use ITR2.
Hi,
I have salary, 3000 stcg and 60000 f&o loss on turnover of 317509.
I dont want to carry forward any loss, can i fill ITR4 or have to fill ITR3 only.
Hi Mohit,
You can use ITR-4 and declare 6% presumptive income on Rs 3,17,509/- i.e Rs 19,050/-.
Sir,
I want to carry forward my loss of Rs. 6lac on stgc to the next years.
Is it compulsory to upload XML file in ITR 3 or can I prepare and submit the return like in ITR 1?
Hi Rupa Bhattacharya
I want to carry forward my loss of Rs. 6lac on stgc to the next years.
Is it compulsory to upload XML file in ITR 3 or can I prepare and submit the return like in ITR 1?
You need to file ITR-2 and can carry forward the loss of Short Term Capital Gains of 6 Lacs.
I have profit from F&O trading, i also have profit from intraday cash trading and some other income.
Can i file ITR4, as i am not maintaining books of accounts. I am showing more than 6% profits too.
What nature of business should i select ?
Thanks
Hi Sagar,
13010 – Investment Activities.
I am salaried and in 2018 May I did some F&O intraday in zerodha… There was 1 lakh loss.
But while filling ITR I filed ITR1, I was not aware that time. Now my question is
1. Can I revise ITR for FY2018-19?
2. If I can revise, as I have already filed ITR-1, what will be my Revised ITR!?
Hi Akshath,
1. Can I revise ITR for FY-2018-19? – Yes, you can revise the return before 30th Sep 2020.
2. If I can revise, as I have already filed ITR-1, what will be my Revised ITR? – the applicable form is ITR-3.
Furthermore, you can carry forward the loss provided if you have filed the return within the due date.
Muje IT return bharna he to muje zerodha me se konsa certificate dena hoga.ye muje kahase milega.
Thanks
I am a professional getting my payment as salary (192) and professional charges (194J).
I did some trading ( not intraday) during FY 2019-20 with a overall loss of 3000/-.
investments in mutual funds which were not redeemed in FY 2019-20.
Doubts:
1. Which ITR I need to file?
2.As I didnt do any mutual fund redemption ,I am supposed to give tax for my share trade only. right? Not to mutual funds?
Hi Jauhar,
1. You need to file ITR-3.
2. Yes, you have to declare loss of only share trade.
Hello Nitin,
I am salaried employee.
Salary – 7Lacs / year
I had invested in equity delivery shares and got loss of 2500rs.(FY-19-20)
Which ITR form I need to fill.(AY20-21)
Do I need to mention this loss in ITR form.
Hi Ramesh,
Salary – 7Lacs / year
I had invested in equity delivery shares and got loss of 2500rs.(FY-19-20)
Which ITR form I need to fill.(AY20-21)
Do I need to mention this loss in ITR form?
Please use ITR -2. Yes you need to mention the loss inorder to carry forward the loss.
Sir,
From Your Article.
So you can use ITR 4 only if you have business income (speculative + non-speculative),
Instructions for filling ITR-4 SUGAM A.Y. 2019-20
B. This return form also cannot be used by a person who has any income of the
following nature during the previous year:-
(a) Profits and gains from business and professions which is not required to be
computed u/s 44AD, 44ADA or 44AE, such as income from speculative
business, agency business, commission or brokerage income etc.;
So it is highly confusing, whether 44 AD can be applied for intraday trading and use FORM 4
Hi Barathidason,
Intraday gains are speculative income – you cannot use ITR-4.
Use ITR-3.
Fine, Nitin, but can we declare under 44AD-Presumptive taxation in ITR 3.
Your article,
7.2 – Different ITR forms
ITR 4 – “So you can use ITR 4 only if you have business income (speculative + non-speculative), but it is best avoided if by use of this form you are reducing your tax liability.”
Does it need correction
Hi Barathidason,
Probably, I would have misunderstood your Q. Apologies.
Intraday gains are speculative income – you cannot use ITR-4. Here what I meant was, you cannot directly declare speculative income as it is. Hence I recommended to use ITR 3.
The following text reproduced also indicates the same:
This return form also cannot be used by a person who has any income of the following nature during the previous year:- (a) Profits and gains from business and professions which is not required to be computed u/s 44AD, 44ADA or 44AE, such as income from SPECULATIVE BUSINESS, agency business, commission or brokerage income etc.;
There are no specific tabs or options to declare speculative income as it is in ITR 4.
Yes, You can APPLY 44AD on intraday gains i.e 6% on turnover. Ensure turnover should be less than 2Cr.
ITR 4 – “So you can use ITR 4 only if you have business income (speculative + non-speculative), but it is best avoided if by use of this form you are reducing your tax liability.” As far as content is concerned, no changes required.
Sorry for the confusion.
Dear Nithin Sir,
Last year I do only intraday, f&o and short term trading. Overall loss around 1.2 lakhs. Which itr form to be used? I want to carry forward the losses. Is audit required? Could I directly file itr form without audit?
I have only interest income last year other than these losses. But interest income is below 1 lakh.
My case last year no income. All about losses.
Please reply.
Regards,
Sreenivas
Hi Sreenivas,
Last year I do only intraday, f&o and short term trading. Overall loss around 1.2 lakhs.
Which itr form to be used? – You need to use ITR-3 as you have FNO, Intraday and Short Term Capital Gains
I want to carry forward the losses. Is audit required? Could I directly file itr form without audit? – That depends on the FNO turnover.
how much maximum turnover can do in F&o stock tradeing for a year
HI Prasad,
How much maximum turnover can do in F&o stock trading for a year – There is no restrictions or threshold limits as such, it is your individual choice.
Hi, If one has a loss in F&O and does not use presumptive taxation, then is an audit required?( assuming turnover < 5 crs & total taxable income including salary is in taxable bracket)
Sorry to bother you again,
1. How to declare the “Speculative income under 44AD ” in ITR 3
2. If we declare under 44AD, we can not disclose it as speculative income .
3. If we declare it as speculative, audit becomes necessary when profit is less than 6%.
4. Could you please clarify
“HOW TO DECLARE THE SPECULATIVE INCOME/ LOSS UNDER 44AD IN ITR 3”
I’m a PSU employee..I hav incurred losses only….
Intraday -155000
Short term -80000
Total profit -236000
Turn over = 642000…wat should I do Nd which ITR I hav to file..
Hi Telex,
I’m a PSU employee..I have incurred losses only….
AA] Intraday -155000
BB] Short term -80000
CC] Total profit -235000
DD] Turnover = 642000…what should I do and which ITR I have to file..
File the return and carry forward the loss.
Use ITR-3, declare speculative loss under Schedule PL and capital gains under Schedule CG.
I trade on zerodha kite platform in Intrady, BTST & delivery basis. From zerodha back office I found these data
Intraday Loss = –2841.90
Intraday Turnovers = 7600
Short Term profit = – 51711
Short term turnovers = 1700000
Long term gain or turn over = N/A
What ITR should I filled and any audit is required or not. Kindly help.
Hi I am salaried employee and not file return for last 3-4 years. Now I got a message about some high vale transaction in 2018-2019 I don’t remember any such transaction. Also I used I had invested in shares but I made huge loss in 2010 and made huge loss and stopped trading after that, so do I need to declare that even though I am not active trader. And which form I should use to file return.
Hi Barathidason
AA] How to declare the “Speculative income under 44AD in ITR 3
You can declare in Schedule PL, please download ITR 3 here (check SL # 61 in Schedule PL) https://www.incometaxindiaefiling.gov.in/downloads/incomeTaxReturnUtilities
BB] If we declare under 44AD, we cannot disclose it as speculative income.
The provisions of Income Tax says
Sub Section 1 of Section 44AD provides that overriding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an ELIGIBLE BUSINESS, a sum equal to eight percent or six percent as applicable of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”
The definition of eligible business is as follows –
• any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and
• whose total turnover or gross receipts in the previous year does not exceed an amount of two crore rupees.
Further, Sub Section 6 of Section 44AD provides that the provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to—
• a person carrying on profession as referred to in sub-section (1) of section 44AA;
• a person earning income in the nature of commission or brokerage; or
• a person carrying on any agency business.
To give you a perspective, Section 44AA (1) or Sub Section 1 of Section 44AA is also reproduced
Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the Official Gazette shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act.
Above professions are excluded from 44AD, the reason being they are covered by 44ADA.
So, applying all the aforesaid sections’ rationale – it is nowhere mentioned that 44AD is NOT applicable for speculative business.
But I understand that in ITR-4 filing instructions – it is mentioned as Profits and gains from business and professions which is not required to be computed u/s 44AD, 44ADA or 44AE, such as income from speculative business, agency business, commission or brokerage income etc.; this is creating confusion
CC] If we declare it as speculative, audit becomes necessary when profit is less than 6%.
If you want to declare income under presumptive scheme and still if you want to declare less than threshold percentages 6% or 8%, then audit under 44AB is necessary. (That is mentioned in the ITR Form as well – refer once you download it)
DD] Could you please clarify “HOW TO DECLARE THE SPECULATIVE INCOME/ LOSS UNDER 44AD IN ITR 3?”
It is answered in AA. Also please note if you are declaring under 44AD – your profit should be NOT less than 6%.
Hope this helps.
Hi Pramod,
Intraday Loss = –2841.90
Intraday Turnover = 7600
Short Term profit = – 51711
Short term turnover = 1700000
Long term gain or turnover = N/A
Which ITR should I filled and any audit is required or not?
You need to use ITR-3, declare Intraday gains under Schedule PL and Short Term details under Schedule CG and carry forward the loss.
No Audit is required.
Hi Fahim,
I am salaried employee and not filed return for last 3-4 years. Now I got a message about some high vale transaction in 2018-2019 I don’t remember any such transaction. Also I used I had invested in shares but I made huge loss in 2010 and made huge loss and stopped trading after that, so do I need to declare that even though I am not active trader. And which form I should use to file return.
I assume your salary income crosses basic threshold limit i.e more than 2.5Lacs or you would have done significant transactions like purchase of property or significant amount in Fixed Deposits.Hence you would have got that e-campaign message.
If your salary is more than 50Lacs – Please file ITR 2 otherwise file ITR 1.
Due date of filing for the return for FY 2018-19 is 30th September.
Hi Shailesh Balachandran,
If one has a loss in F&O and does not use presumptive taxation, then is an audit required?(assuming turnover < 5 crs & total taxable income including salary is in taxable bracket)
I assume you are asking this Q for FY 2020-21 (because you have mentioned – 5 Crores)
NO AUDIT is required if you are having FNO transactions for first time for FY 2020-21 and declaring loss and also turnover is less than 5 Crores.
Suppose, if you had FNO Income for any previous years and you were declaring under presumptive scheme under section 44AD; (meaning currently you are in presumptive scheme upto FY 2019-20)
now if you are opting OUT of presumptive scheme in FY 2020-21 and your FNO Income is less than 6%(meaning either in loss or in profits less than 6%) but total income is greater than basic exemption limit; then you have maintain books of accounts and get the AUDIT done [Tax Audit is applicable].
Thank you so much Nitin sir for this amazing module on taxes, Feels gratitude for it.
However I have few doubts about taxation,
1) Does LTCG on equity or equity based Mutual fund have indextion effect as it was seen in case of debt mutual fund ?
2) If all the liquid income from Trading activities are invested in shares of the company for long term (before ending of a financial year) will that income from trading be still taxed ?
3) How are dividends taxed ? Is there any limit upto which they are exmpted from tax
4) Is it possible to switch from old tax regime to new one and vice-versa, more than once, for example If today I switch from Old to new system and lets say after 5 years I change my mind and would wish to come back to old tax system, Is that possible ?
HI Vaishak,
AA] Does LTCG on equity or equity based Mutual fund have indexation effect as it was seen in case of debt mutual fund?
No, indexation benefit is available only on debt mutual funds and unlisted shares.
BB] If all the liquid income from Trading activities are invested in shares of the company for long term (before ending of a financial year) will that income from trading be still taxed ?
Yes, trading income will be still taxed as usual. However, You can save long term capital gains by investing in a residential property subject to fulfilment of certain conditions.
CC] How are dividends taxed ? Is there any limit upto which they are exempted from tax?
Upto FY 2019-20, Dividends are taxed @ 10% over and above Rs 10 Lacs. Upto Rs 10 Lacs it is exempt.
From FY 2020-21 onwards, Dividends are taxed as per normal slab rates.
DD] Is it possible to switch from old tax regime to new one and vice-versa, more than once, for example If today I switch from Old to new system and lets say after 5 years I change my mind and would wish to come back to old tax system, Is that possible ?
That depends whether you have business income or not.
Individuals having business income are not eligible to choose between the existing tax regime and new tax regime every year. This would mean that salaried individuals and pensioners would be eligible to switch between new tax regime and old tax regime as per their convenience every year provided they don’t have business income.
Sir,
I dont have any salary income
I do only trading
Short term Loss 10K
Long term loss 42K
Intraday loss 2K
Which Return is Benificial for me to File ?
Can i Carry Forward Long Term Losses ?
HI Chaitanya Nimavat,
I don’t have any salary income
I do only trading
Short term Loss 10K
Long term loss 42K
Intraday loss 2K
Which return is beneficial for me to file? – Please file ITR-3. Declare Intraday loss under Schedule PL, Short Term Loss and Long Term Loss under CG and 112A respectively.
Can I Carry Forward Long Term Losses? – Yes, you can carry forward the loss if you file before the due date of filing the return.
Sir , I am a college student. I have made a profit of 80000 in trading for the financial year . I have no other source of income . Which form shall I submit.
Hi Towfeeq,
Sir , I am a college student. I have made a profit of 80000 in trading for the financial year . I have no other source of income . Which form shall I submit?
I assume you have done 80K in FNO. Answer is two fold
1. You can use IT4 and declare the Profit under presumptive basis if your turnover is less than Rs 2Crore.
2. You can use ITR3 and declare the profits by maintaining books.
Since you don’t any other source apart from trading income – you can go ITR4.
Hi Nithin,
I am trader. I have 2 lakhs in trading account (zerodha) and I made around 90,000 Net realized Loss (both speculative and non-speculative. Most of the loss in the form of taxes) from 2020-apr to today and I have salary <5 lakhs / year. Leaving salary, am I liable to pay tax for my trading loss in this case?
Also, we have to pay tax for profits from the trading irrespective of how much money you have in the trading account (may be 2 or 5 or 10 lakhs), am I right? Please correct me if I am wrong.
Thank you in advance!!
Hi Naveen,
AA] I am trader. I have 2 lakhs in trading account (zerodha) and I made around 90,000 Net realized Loss (both speculative and non-speculative. Most of the loss in the form of taxes) from 2020-apr to today and I have salary <5 lakhs / year. Leaving salary, am I liable to pay tax for my trading loss in this case?
There is no tax liability on the trading loss incurred. No need to pay tax.
BB] Also, we have to pay tax for profits from the trading irrespective of how much money you have in the trading account (may be 2 or 5 or 10 lakhs), am I right? Please correct me if I am wrong.
For an individual, tax liability arises when total income(in your case salary and trading income) is above 2.5Lacs.
Simple and clear. Thank you, San!
So if I want to carry forward my losses, I should file IT returns, isn’t it?
Hi Naveen,
So if I want to carry forward my losses, I should file IT returns, isn’t it? – Yes, please file it before the due date in order to carry forward the losses.
Thank you so much San !
Hi,
I’d highly appreciate if my query could be answered. I have the following details:
– Intraday Loss: (31600) Turnover: 1,00,000
– F&O Loss: (2,10,000) Turnover: 1,10,00,000
– Other income: 4,50,000
My question is two fold:
– Do i require a tax audit?
– If tax audit is required, would it be beneficial to declare 6% (~ 6,66,000) of turnover as presumptive income to skip the audit? (Possibly it would be cheaper to get the audit done?)
Sir, I am a govt salaried person, net salary is 1100000, intraday loss is 3000, which form should I fill for the FY 2019-20??
My income is greater than 2.5L p.a.
Intraday turnover: 100
Intraday loss: 100
Short term profit: 300
Long term profit: 0
As there is such minimal loss in Intraday, going with auditing costs and carrying it forward doesn’t make sense. In this case would it be advisable to show Rs 6(6% of turnover) as intraday profit(presumptive income) and get away from auditing?
Could this result in any kind of notice/penalty?
Also, there are certain DP charges and STT charges(totalling to 400) assosiated with trades(both intraday and Short-term), should I show all these in Intraday enpenditure or not?
Hi Shokun,
I have the following details:
– Intraday Loss: (31600) Turnover: 1,00,000
– F&O Loss: (2,10,000) Turnover: 1,10,00,000
– Other income: 4,50,000
My question is two fold:
– Do i require a tax audit? No tax audit is required as threshold limit is Rs 5 Crore and all the transactions are 100% digital. File ITR 3 and declare the losses appropriately.
Further you can set off the FNO Loss with other income of Rs 4.5 Lacs.
– If tax audit is required, would it be beneficial to declare 6% (~ 6,66,000) of turnover as presumptive income to skip the audit? (Possibly it would be cheaper to get the audit done?) – Tax audit not required; however still you can declare under presumptive basis if you wish not to show the losses.
Hope this helps
Hi Mandira,
I am a govt salaried person, net salary is 1100000, intraday loss is 3000, which form should I fill for the FY 2019-20??
Please use ITR-3 and file the return.
Declare the Intraday loss under Schedule PL.
Hi Shubam Gupta,
My income is greater than 2.5L p.a.
Intraday turnover: 100
Intraday loss: 100
Short term profit: 300
Long term profit: 0
As there is such minimal loss in Intraday, going with auditing costs and carrying it forward doesn’t make sense. In this case would it be advisable to show Rs 6(6% of turnover) as intraday profit(presumptive income) and get away from auditing?
Could this result in any kind of notice/penalty?
Tax Audit is not applicable for you as your turnover is less than threshold limit. Use ITR-3.
I assume you were not under presumptive scheme in previous year.
Also, there are certain DP charges and STT charges(totaling to 400) associated with trades(both intraday and Short-term), should I show all these in Intraday expenditure or not?
For Short Term – you can show charges as your expenses except STT.
For Intraday – there won’t be any DP charges. Other charges you can show.
Thank you very much for your reply San. I appreciate it. It definitely makes things clear.
-Hi San,
Further to your response to my query above,
– is the threshold limit of Rs5 crore applicable for IT filing for FY2019-20(AY2020-21)?
– if not, does anything change in your response to my case?
Hi Shokun,
Further to your response to my query above,
AA] is the threshold limit of Rs 5 crore applicable for IT filing for FY2019-20(AY2020-21)?
BB] if not, does anything change in your response to my case?
AA] Yes, it is applicable from FY 2019-20.
(in some of the queries above I might have stated it as FY 2020-21, but it is applicable from FY 2019-20)
BB] My response remains same.
Hi Nithin,
Thank you so much for putting together such useful information, would have been very difficult otherwise.
I would be filing ITR3 as have done FNO and will be declaring the same as Business Income. I believe all my personal assets and liabilities have to be declared. I am declaring Bank balance, Stock investments, etc.. as assets and Outstanding Credit Card balance as Liabilities. My question is.. how do I balance both? I think the difference between total of Assets and Liabilities to be shown as equity/net worth. It will be very helpful if you could let me know how the entry to be made. As a Liability?
Thank you once again!
Regards,
Balaji.
Hi,
I am working in private it firm and my salary is 10 LPA
i mostly invest in equity and buy mutual fund from my saving Please advice which ITR to be filled.
Hi,
I usually use http://www.incometaxindiaefiling.gov.in for e-filing the return of income. is it required to file itr from zerodha also.
Hi Balaji,
I would be filing ITR3 as have done FNO and will be declaring the same as Business Income. I believe all my personal assets and liabilities have to be declared. I am declaring Bank balance, Stock investments, etc.. as assets and Outstanding Credit Card balance as Liabilities. My question is.. how do I balance both? I think the difference between total of Assets and Liabilities to be shown as equity/net worth. It will be very helpful if you could let me know how the entry to be made. As a Liability?
The difference between total assets and liabilities will be Capital. You can declare the declare under Sources of Funds – Proprietor’s Capital if assets are more than liabilities.
Hi Rakesh,
I am working in private it firm and my salary is 10 LPA
i mostly invest in equity and buy mutual fund from my saving Please advice which ITR to be filled.
Please use ITR 2
Sir one can only file ITR 4 if his profit is less than 6% of turnover(profit + loss)
Hi my salary is per annum 2lac 40thousand and i work in intraday trade with leverage per day somthing 15k around so its calculate my p/l or total turnover can i file itr? I haven’t show my protfolio any profit all are losses 🤣😂
Hi Akshat,
One can only file ITR 4 if his profit is less than 6% of turnover(profit + loss) = One can file ITR 4 under 44AD only if FNO profit is more than 6%.
HI Ritwik,
My salary is per annum 2 Lac 40 thousand and i work in intraday trade with leverage per day something 15k around; so its calculate my p/l or total turnover can i file itr? I haven’t show my portfolio any profit all are losses.
File ITR-3 and carry forward the losses. You can set off it future years with profit.
While filing ITR 3 for F&O trading for books maintained case, what should be the value of gross receipt in P&L? Turnover of F&O calculated here or just proceeds received towards sale. As if turnover as calculated above is used as gross receipts and actual cost of purchase is entered, then the profit arising out is more than actual profit. For e.g. if I receive Rs. 10000 from sale of option and I make profit of Rs. 5000 in the process, my turnover comes out to be Rs. 15000. So if I used this value as gross receipts and cost of purchase as Rs. 5000, the profit comes out to be Rs. 10000, whereas I had made only Rs. 5000 as profit.
Hi Vinit Bansal,
While filing ITR 3 for F&O trading for books maintained case, what should be the value of gross receipt in P&L? Turnover of F&O calculated here or just proceeds received towards sale. As if turnover as calculated above is used as gross receipts and actual cost of purchase is entered, then the profit arising out is more than actual profit. For e.g. if I receive Rs. 10000 from sale of option and I make profit of Rs. 5000 in the process, my turnover comes out to be Rs. 15000. So if I used this value as gross receipts and cost of purchase as Rs. 5000, the profit comes out to be Rs. 10000, whereas I had made only Rs. 5000 as profit.
Turnover calculation is for determining the applicability of tax audit.
Input the Sale value of premiums under Sales/Turnover/Gross receipts; and purchase value of premiums under Purchases.
The resultant figure will be profit.
Hope this helps.
Sir am a salaried person having income of Rs 8.00 lacs around. Having F ans O losses around 2.0lacs,long term losses around 50000/-
am not having any gains from stock market. All together losses in intraday and F and O for the year more than 3.00 lacs and am not having any other income. Whether I need to pay tax for entire 8.00 lacs or whether 3.00 lacs losses reduces from income.
Hi Sridhar,
Sir am a salaried person having
AA] Salary income of Rs 8.00 lacs.
BB] F&O losses around Rs 2.0lacs.
CC] Long term capital losses around Rs 50000/-
DD] All together losses in intraday and F and O for the year more than Rs 3.00 lacs.
Whether I need to pay tax for entire 8.00 lacs or whether 3.00 lacs losses reduces from income.
You need to pay tax on entire salary income of 8 Lacs, because you cannot adjust FNO Losses, Intraday Losses and Capital Gain Losses against Salary Income.
File ITR-3 and carry forward all the losses for setting off in future years.
Hi Nithin,
First of all, thank you for the wonderful chapter.
I have the following financial condition for FY 2019-20:
Salary: Rs 6,60,000
Intraday trading LOSS – Rs 12,075, turnover : Rs 26,626
Short term capital LOSS from delivery trades : Rs 10,125
F&O LOSS : Rs 18,415, turnover: Rs 1,24,823
My query:
1. From the chapters and the comments, i understood that i need to file ITR3 and need to have audit as my turnover is below limit and i have incurred loss
(profit not > 6%). My question is can i skip audit if i don’t need to carry forward the losses.
2. If i cannot, then can i file ITR4 and add 6% of turnover to my income and pay taxes as per the income slab?.
3. “”””So if you are a trader with turnover less than Rs 5 Crores for the year (was Rs 2 crore until FY 19/20) and profit less than 6%* of the turnover with
only business income (not possible if you have capital gains)”””.
you have specified that if an indivudual have capital gains you cannot file ITR4. Does it apply for capital losses as well?
4. in above quote, what is meant by “profit less than 6%* of the turnover with only business income”? Is it applicable if you are salaried as well?
Kindly help with my queries. Thanks in advance
Hi Hari,
1] Salary: Rs 6,60,000
2] Intraday trading loss – Rs 12,075, turnover : Rs 26,626
3] Short term capital loss from delivery trades : Rs 10,125
4] F&O Loss : Rs 18,415; Turnover : Rs 1,24,823
My query :
AA] I understood that i need to file ITR-3 and need to have audit as my turnover is below limit and I have incurred loss (profit not > 6%). My question is can i skip audit if i don’t need to carry forward the losses.
First and foremost, tax audit is not required to carry forward the loss and if your turnover is less than threshold limit.
This profit not > 6% applies in below scenario
Suppose, if you had FNO Income for any previous years and you were declaring under presumptive scheme under section 44AD; (meaning currently you are in presumptive scheme upto FY 2019-20)
AND now if you are opting OUT of presumptive scheme in FY 2020-21 and your FNO Income is less than 6%(meaning either in loss or in profits less than 6%) but total income is greater than basic exemption limit; then you have maintain books of accounts and Tax Audit is applicable.
Further, if you don’t need to carry forward the losses – you can opt for presumptive taxation scheme and declare 6% on FNO turnover and pay taxes accordingly.
BB] If I cannot, then can i file ITR-4 and add 6% of turnover to my income and pay taxes as per the income slab?.
Yes, you can do that.
CC] So if you are a trader with turnover less than Rs 5 Crores for the year (was Rs 2 crore until FY 19/20) and profit less than 6%* of the turnover with only business income (not possible if you have capital gains).
you have specified that if an individual have capital gains you cannot file ITR-4. Does it apply for capital losses as well?
Yes, an Individual having capital gains cannot file ITR-4 because there is no Schedule Capital Gains(CG) in ITR-4 and it applies to capital losses as well.
DD] in above quote, what is meant by “profit less than 6%* of the turnover with only business income”? Is it applicable if you are salaried as well?
“Profit less than 6% of the turnover” here refers to business income ONLY. It is not applicable to salary income .
Hi san,
Thank you for your quick reply.
In my scenario it will be my first year i am filing form other than ITR1. So in my case i am not currently in presumptive scheme.
So considering my situation :
Salary: Rs 6,60,000
Intraday trading LOSS – Rs 12,075, turnover : Rs 26,626
Short term capital LOSS from delivery trades : Rs 10,125
F&O LOSS : Rs 18,415, turnover: Rs 1,24,823
Do i need to audit. ?
Hi Hari,
If you are having FNO business income for the first time – then no tax audit is required to carry forward the business loss provided the turnover is below the threshold limit.
In your case – No tax audit is required as turnover is 1.24Lacs which is below the threshold limit.
Hi san,
Thank you for your reply.
So even if i have STCG and LTCG losses along with F&O loss, there is no need of audit right?
Can you please provide the threshold limit for turnover you have mentioned. is it 5Cr?
Also when i entered my details in quicko, quicko recommends as audit applicable. Can you please tell if there is any option i can do in quicko so that audit will not be applicable.
Thank you very much.
I have income from equity shares around 70000 and other from self-business.
Overall my income is less than 2lacs.
Which iTR form I need to file
Hi Maitri,
I have income from equity shares around 70000 and other from self-business.
Overall my income is less than 2 Lacs.
Which ITR form I need to file?
Please file ITR-3 declaring you capital gains under Schedule CG and 112A as applicable and Business Income under Schedule PL.
Hi Hari,
So even if I have STCG and LTCG losses along with F&O loss, there is no need of audit right? – Yes, no audit required.
Can you please provide the threshold limit for turnover you have mentioned. is it 5Cr? – Yes, it is 5Cr.
Also when i entered my details in quicko, quicko recommends as audit applicable. Can you please tell if there is any option i can do in quicko so that audit will not be applicable. – I have not used quicko till now.
Hi Team, hope you are all well. I’m an employed person and I have form 16 but along with this, I invested some amount in equities and I hold some shares for more than 365 days and some are shorter to 365 days. So, I don’t have any P&L yet as I haven’t sell a single share. In this case, do I have to fill ITR? If yes, should I fill ITR-2 ? How should I show my equities as I don’t have any P&L neither in LTCG nor in STCG. Please do the needful.
Hi,
I am salaried and my long term capital gain is in loss. Do I need to file itr2.
Please note I don’t want to carry forward the loss as it is quite minimal. Can I proceed with itr1 for my case ?
Hi Akshay,
I’m an employed person and I have form 16 but along with this, I invested some amount in equities and I hold some shares for more than 365 days and some are shorter to 365 days. So, I don’t have any P&L yet as I haven’t sold a single share. In this case, do I have to fill ITR? If yes, should I fill ITR-2 ? How should I show my equities as I don’t have any P&L neither in LTCG nor in STCG.
Filing of ITR-1 is enough because you don’t have any capital gains.
Hi Vijay,
I am salaried and my long term capital gain is in loss. Do I need to file itr2.
Please note I don’t want to carry forward the loss as it is quite minimal. Can I proceed with itr1 for my case ?
It wont take much of your time – Please try to file ITR-2.
Yes, if you dont want carry forward the loss – please proceed with ITR-1
Hi
If my income is less than ₹100000 in the financial year and I made a transaction ₹900000 by swaping a liquid fund daily div to a balance fund of other fund house. There is no short term capital gain or long-term capital gain. However, AMC has informed Income tax about the transaction. Which form should I use to file a return in this case. All these years I was using Form 1.
Hi Srinath,
If my income is less than ₹100000 in the financial year and I made a transaction ₹900000 by swapping a liquid fund daily div to a balance fund of other fund house. There is no short term capital gain or long-term capital gain. However, AMC has informed Income tax about the transaction. Which form should I use to file a return in this case. All these years I was using Form 1.
Switching between schemes amounts to sale under Income Tax Act and will be subject to capital gains, if any.
Please use ITR-2 and declare the same under Schedule CG.
Respected sir,
I am government salaried employee. I did intraday trading about rupees 900 and gain of rupees 300.which itr should I file?
Hi nitin
In FY 2019-20: I have short term loss about 96000₹ and intraday profit about 15000₹. Which Itr I have to file?
Hi Nagendra Kumar Yadav,
In FY 2019-20: I have short term loss about 96000₹ and intraday profit about 15000₹. Which ITR Form I have to file?
Please file ITR-3. Declare Capital Gains under Schedule CG(#A3) and Intraday Gains under Schedule PL(#65)
Hi Palash Sarkar,
I am government salaried employee. I did intraday trading about rupees 900 and gain of rupees 300.Which ITR should I file?
Please ITR-3 and declare Intraday gains under Schedule PL.
Respected sir,
I ,Palash Sarkar a government employee.I did Intraday trading and gain of rs 300 and STCG of rs about 500.please tell me in which coloumn in ITR3 I can fill these profit?
Hi Palash Sarkar,
I did Intraday trading and gain of Rs 300 and STCG of Rs about 500.
Please tell me in which column in ITR-3 I can fill these profit?
Please enter Intraday Gains in Schedule PL – # 65. You need to enter the details as below
1. Turnover from Speculative Activity(Intraday Turnover)
2. Gross Profit
3. Expenses
4. Net Income(Autocalculated)
Please enter Short Term Cap Gains in Schedule CG – #3.
Sir
I am a house wife
I don’t have any salary income
I do intraday trading , short term & long term investments only
Is it compulsory audit with a CA to carry forward my Losses ?
Hi E Leela Prasanna,
I don’t have any salary income
I do intraday trading , short term & long term investments only
Is it compulsory audit with a CA to carry forward my Losses ?
Audit is not compulsory to carry forward the losses.
Ensure your turnover is below the threshold limit of Rs 5 Crs.
Hi Sir,
I am a housewife , my main source of income from pocket money, from husband. I am only doing Intraday frequently.
Intraday trading total gain is Rs 34070 .
My query:
1. which ITR I have to apply 3 or 4
2. As per my friend advise, Intraday trades should be E-filling the total trading value(buy+sell) if crossing 2core, is it true information.
3. If above mention Q.2 correct, I have to do e-payment and e-filing same time, right?
Kindly assist with my queries.
HI Ann,
I am a housewife , my main source of income from pocket money, from husband. I am only doing Intraday frequently.
Intraday trading total gain is Rs 34070
My query:
AA] Which ITR I have to apply 3 or 4 – You need to file ITR-3. Declare Intraday Gains in Schedule PL – # 65.
BB] As per my friend advise, Intraday trades should be E-filling the total trading value (buy+sell) if crossing 2 Crore, is it true information? – No, it is not trading value – it is absolute gains. Absolute gains or profit is the sum of positive and negative differences. Also, you need to e file your return even if your turnover is less than 2 Crores. (now that limit is increased to 5 Crores)
CC] If above mention Q.2 correct, I have to do e-payment and e-filing same time, right? – If your net gains is above basic exemption limit of Rs 2.5Lacs; You need to file your return.
Hi San,
I have a question regarding fractional shares entitlement taxation.
I used to have Bharat financial inclusion shares purchased in FY 2014-2015 which got merged in to IndusInd Bank in FY 19-20. so I received Indusind bank shares upon merger but as per merger calculation the shares were not a whole number but ended up having 0.4 fractional share entitlement which was sold by the appointed trustees and the cash deposited in my account. I have following questions.
1. is this tax free? whats the tax treatment of these cash received? which schedule and where do I report them in my ITR2?
2. if its STCG/LTCG then what will be the cost of acquisition and date of purchase?
3. if this is LTCG and needs to be reported in schedule 112A?
4. the cash that I have received – is that after deducting brokerage and other taxes/charges and is STT paid on it?
Would appreciate your expert guidance on same.
Thanks,
Can you please guide me on my above query please.
waiting for your reply. It will be great if this particular situation be added to Varsity too
as I have tried to look around a lot and couldnt find an answer.
thanks
Hi Peeyush,
1. is this tax free? whats the tax treatment of these cash received? which schedule and where do I report them in my ITR2? – It will be capital gain depending the period of holding.
2. if its STCG/LTCG then what will be the cost of acquisition and date of purchase? – As per Income Tax provisions, the cost of acquisition in the IndusInd shares shall be same cost of acquistion of shares of Bharat Financial Inclusion. Same applies to the period of holding as well.
3. if this is LTCG and needs to be reported in schedule 112A? – Yes.
4. the cash that I have received – is that after deducting brokerage and other taxes/charges and is STT paid on it? – Yes, it is after all the expenses. Please check if you have received any reports.
Hi Nithin,
I am a salaried employee. I don’t do any trading. I have interest income and long & short term capital gains. My income is less than 50 lakhs ( Which I think rules out ITR-2). Which form should I use?
Respected sir,
I Palash Sarkar,l am going to fill ITR3.how can I get expenses and Gross profit from zerodha statement?
Respected sir,
I Palash Sarkar going to fill ITR3.How can I get expenses and Gross profit from zerodha statement?
Hi San,
Thanks a lot for your reply on my IndusInd fractional shares query
4. the cash that I have received – is that after deducting brokerage and other taxes/charges and is STT paid on it? – Yes, it is after all the expenses. Please check if you have received any reports.- actually as I dint sell the fractional shares and it was sold by Indusind bank appointed trustees so the only mail I have received from IndusInd bank is deposit of the fractional amount in my bank account. they have not given any breakup o same if that includes STT and any other brokerage charges incurred by them. what is your suggestion on same in this case. as I didnt pay any brokerage/STT. How do I report it in ITR?
Hi Palash,
I am Palash Sarkar,l am going to fill ITR3. How can I get Gross profit from zerodha statement?
Please download TaxPL Excel. Refer “EQ-TAX-PNL” Sheet and consider turnover from “Intra-day/speculative turnover” [65(i)]
Gross profit will be under “Realized Profit Breakup” – Intra-day/Speculative profit. [65(ii)]
Hi Peeyush,
4. the cash that I have received – is that after deducting brokerage and other taxes/charges and is STT paid on it? – Yes, it is after all the expenses. Please check if you have received any reports.- actually as I dint sell the fractional shares and it was sold by Indusind bank appointed trustees so the only mail I have received from IndusInd bank is deposit of the fractional amount in my bank account. they have not given any breakup o same if that includes STT and any other brokerage charges incurred by them. what is your suggestion on same in this case. as I didnt pay any brokerage/STT. How do I report it in ITR?
If you have the cost of acquisition details – try to arrive the profit or loss by reducing the purchase cost from sale proceeds received in your bank.
Hi ,
I have an salary of 10lk pa and have also started trading. The data mentioned is for FY 2019-2020
Intraday profit : 85.5k
Intraday turnover : 1.4L
Short term realized profit : -72.78k
Total charges : 31.17k
Other credits/debits : -2.43k
Net Realized P&L : -20867.92
Do I need to get the tax audited?
Should ITR3 be used
Hi Deepthi,
I have an salary of 10 lacs pa and have also started trading. The data mentioned is for FY 2019-2020
Intraday profit : 85.5k
Intraday turnover : 1.4L
Short term realized profit : -72.78k
Total charges : 31.17k
Other credits/debits : -2.43k
Net Realized P&L : -20867.92
Do I need to get the tax audited?
Should ITR3 be used?
Yes you need to use ITR-3. There is no requirement of Audit as your turnover is the below the threshold limit.
Hi San,
Thanks for your reply.
Wanted to clarify my doubt wrt to my previous query based on the articles which I had read on quicko:
Trading Turnover up to Rs. 1 Cr:
Tax Audit as per Sec 44AB(e) is applicable if there is loss or profit is less than 6% of Trading Turnover and total income exceeds the basic exemption limit.
Tax Audit is not applicable if the profit is more than or equal to 6% of Trading Turnover.
In mycase , total income is exceeding basic exemption limit(salary) and since it is a loss(Net Realized P&L) am I not supposed to get it audited? Am I missing something here?
Also when I had used quicko tool , it showed that I had tax dues of 20k after the importing the trade statements from zerodha. Can’t the loss be carried forward to the next year? How is it arriving at 20K?
Hi Deepthi,
AA]
Tax Audit as per Sec 44AB(e) is applicable if there is loss or profit is less than 6% of Trading Turnover and total income exceeds the basic exemption limit.
Tax Audit is not applicable if the profit is more than or equal to 6% of Trading Turnover.
In mycase ,total income is exceeding basic exemption limit(salary) and since it is a loss(Net Realized P&L) am I not supposed to get it audited? Am I missing something here?
You should Section 44AB(e) along with Section 44AD. This – “if there is loss or profit is less than 6% of Trading Turnover and total income exceeds the basic exemption limit” is applicable in the below scenario:
Suppose, if you had FNO Income for any previous years and you were declaring under presumptive scheme under section 44AD; (meaning currently you are in presumptive scheme upto FY 2019-20)
AND now if you are opting OUT of presumptive scheme in FY 2020-21 and your FNO Income is less than 6% or you are in loss but total income is greater than basic exemption limit; then you have maintain books of accounts and Tax Audit is applicable
BB] Also when I had used quicko tool , it showed that I had tax dues of 20k after the importing the trade statements from zerodha. Can’t the loss be carried forward to the next year? How is it arriving at 20K?
I have not used Quicko – I have no idea about this.
Respected sir,
I Palash Sarkar, I started my trading on 11-11-2019.but PNL statement from zerodha shows the trading report from 01-04-2020 to 31-03-2021.today I am going to file ITR 3 for first time .But how can I get the trading statement before 01-04-2020 .
HI Palash,
I started my trading on 11-11-2019.but PNL statement from zerodha shows the trading report from 01-04-2020 to 31-03-2021.today I am going to file ITR 3 for first time .But how can I get the trading statement before 01-04-2020.
Please select Financial Year 2019-2020 and download the statement.
Respected sir,
I Palash Sarkar going to file ITR3,how can I calculate Intraday profit percentage?
Hi Palash,
how can I calculate Intraday profit percentage? – Divide Intraday Profit by Intraday Turnover.
(Intraday Profit/Intraday Turnover*100)
Respected sir,
I Palash Sarkar .I am salaried person and do sometimes trading.I have a question that for salary which coloumn I have to fill?
Respected sir,
I palash sarkar, going to file ITR3. I am a salaried person and do trade sometimes.sir for salary which coloumn I have to fill?
Hi,
I am a PSU employee and I am having income from trading (intraday, delivery, f&o, currency).
1. which ITR do i need to file?
2. If ITR 3, then which rate my profits will be taxed at?
3. How to disclose STCG and LTCG differently in itr3?
pls help.
Hi Palash,
I palash sarkar, going to file ITR3. I am a salaried person and do trade sometimes.sir for salary which coloumn I have to fill?
Please fill Salary details under Schedule S (Salary) – Refer your form 16 and fill it.
Hi Deva,
I am a PSU employee and I am having income from trading (intraday, delivery, f&o, currency).
AA] Which ITR do i need to file? – You need to File ITR-3.
BB] If ITR 3, then which rate my profits will be taxed at? – Your trading profits(FNO, Intraday and Currency) will be taxed as per your slab rates. STCG will be taxed @ 15% whereas LTCG exceeding Rs 1 Lacs will be taxed @ 10%. LTCG upto Rs 1 Lacs is exempt.
CC] How to disclose STCG and LTCG differently in ITR-3? – Declare STCG under Schedule CG and LTCG under Schedule 112A.
Respected sir,
I palash sarkar going to file ITR3 but after downloading the jip file from website,it can not be extracted.can you give what may be the problem?
Hi Palash,
I palash sarkar going to file ITR3 but after downloading the jip file from website,it can not be extracted. Can you give what may be the problem?
Guess you don’t have extraction/compression utility – download WinRAR and try extracting https://www.win-rar.com/affdownload/download.php
Respected sir,
I Palash Sarkar going to file ITR3.After downloading the zip file it can not unzipped.even I used Winrar software.I doubt this problem is due to system missmatch from the required system. Can you tell me which system is required for this process?
Hi Palash,
Below are the system requirements:
AA] Excel Utilities: Macro enabled MS-Office Excel version 2010/2013/2016 on Microsoft Windows 7 / 8 /10 with .Net Framework (3.5 & above)
BB] Java Utilities : Microsoft Windows 7/8/10, Linux and Mac OS 10.x with JRE (Java Runtime Environment) Version 8 with latest updates.
JRE can be downloaded from https://java.com/en/download/
I have earned less than 3K from trading (short term, delivery) this year. And my salary is around 5 lack PA, so I has to file ITR1 and ITR2 both? and please tell me which column I has to fill about this 3k income from trading?
Hi Vijay,
I have earned less than 3K from trading (short term, delivery) this year. And my salary is around 5 lack PA, so I has to file ITR1 and ITR2 both? and please tell me which column I has to fill about this 3k income from trading?
If you have both Intraday and Short Term Capital Gains – File ITR-3
If you have only Short Term Capital Gains – File ITR-2
sir
intraday ……… -26rs
intraday turn…….198.90rs
stcg ……… -87928.65rs
ltcg ……… 0rs
fno ……… -83012.00rs
fno turnover…… 851000rs
dividends……… 1500rs
please help sir which itr am i supposed to fill and do i require audit ???
Respected sir,
I Palash Sarkar going to file ITR3. I have file the part A general on my friend’s pc.can I take the uncompleted file on my pen drive and file that later,because I have no PC.
Hi Arun,
Intraday ……… -26rs
Intraday turn…….198.90rs
stcg ……… -87928.65rs
ltcg ……… 0rs
fno ……… -83012.00rs
fno turnover…… 851000rs
dividends……… 1500rs
Which ITR am I supposed to fill and do I require audit ???
Please use ITR-3. Declare Intraday Gains under Schedule PL, Short Term Capital Gains under Schedule CG, Long Term Capital Gains under Schedule 112A and Dividends under Schedule EI.
No Audit is required. (I assume you don’t have any other source of income and you have not opted for presumptive scheme in the previous year)
Hi Palash,
I have file the part A general on my friend’s pc. Can I take the uncompleted file on my pen drive and file that later, because I have no PC. – Yes, you can save draft and take it on pendrive.
Respected sir,
I Palash Sarkar,have file ITR3 in xlsm format.but it is required to convert their xlsm format to XML format .how can I convert this
I AM RETIRED
I GET “INTEREST” ON FIXED DEPOSIT INCOME…ONLY SOURCE OF INCOME
WHICH ITR FORM SHUD I FILE
YOUR ADVICES TO ALL R GREAT
THANKS IN ADVANCE
PIYUSH GM
Hi Piyush Sir,
I get “interest” on fixed deposit income…only source of income – Please file ITR-1.
Respected sir,
I Palash Sarkar,have file ITR3 in xlsm format.but it is required to convert their xlsm format to XML format .how can I convert this?
HI Palash,
Have file ITR3 in xlsm format;but it is required to convert their xlsm format to XML format. how can I convert this?
Top right – you will have the button – Generate Xml; please click on it. After few validations – you will be asked to save the Xml. Save the same.
Respected sir,
I Palash Sarkar, have filed ITR3 .I have to convert the XLSM file to XML format .Can I fallow the step?
Open the Excel sheet–>file->save as–>excel 2004 XML spread sheet(XML)–>save
Respected sir,
I Palash Sarkar, have filed ITR3 .I have to convert the XLSM file to XML format .Can I fallow the step?
Open the Excel sheet–>file->save as–>excel 2004 XML spread sheet(XML)–>save
Hi Palash,
Have filed ITR3 .I have to convert the XLSM file to XML format?
Once you update all the details in ITR XL(macro file) – validate the same by clicking “calculate tax” button in PARTB – TI – TTI sheet. Then click “Generate Xml”
After complete validation – it takes to new sheet by same “Summary” where you can save the xml.
For salaried employees, there is a form 16 which is received from the company which summarizes all taxes payable and any return applicable. If I have not declared my stock market investment in form 16, how can I file separately for any tax applicable for trades through zerodha?
HI Manju,
There is a form 16 which is received from the company which summarizes all taxes payable and any return applicable. If I have not declared my stock market investment in form 16, how can I file separately for any tax applicable for trades through Zerodha?
Use ITR-2 or ITR-3 as applicable and file a revised return including the capital gains along with Salary.
my name is siddhartha i came to stock market 1month ago as a student i kept my savings on stock market aand gained profit of just 1000rs should i file any itr if any itr please mention!
HI Kommadamaina Siddhartha,
I came to stock market 1month ago as a student; I kept my savings on stock market and gained profit of just 1000rs. Should I file any ITR if any ITR please mention!
Either ITR2 or ITR3 will be applicable to you; depending upon your gains.
If you have Intraday Gains – you need file ITR-3 otherwise ITR2.
You need to file mandatorily if your gains cross Rs 2.5Lacs.
Hi, My name is Ketan, my annual income is 1lakh 90 thousand and I buy share and sell within 6months from purchase. So am I liable for Income tax return ? plz help
Hi Ketan Patil,
My annual income is 1lakh 90 thousand and I buy share and sell within 6months from purchase. So am I liable for Income tax return ?
It is optional as your gross income is less than Rs 2.5Lacs.
Hello please suggest me what ITR form should be filed by a housewife if
1. Short term gains from equity is 25000 and intraday/speculative loss is 23000. Hence very little net profit.
2. No F&O trading at all.
3. No other income.
4. As obvious, turnover too isn’t much.
5. Can this intraday loss of 23000 be carried forward ?
6. No long term gains.
Please suggest.
Hi Ujjwal,
Hello please suggest me what ITR form should be filed by a housewife if
1. Short term gains from equity is 25000 and intraday/speculative loss is 23000. Hence very little net profit.
2. No F&O trading at all.
3. No other income.
4. As obvious, turnover too isn’t much.
5. Can this intraday loss of 23000 be carried forward ?
6. No long term gains.
You need to file ITR-3. Declare Short Term Capital Gains under Schedule CG and Intraday details under Schedule PL.
Further, you can carry forward the intraday loss of Rs 23,000 for a period of 4 years.
Nikhil Sir,
I have long term loss of 12000 around, I need to fill ITR2, do I need to fill long term loss or not in ITR2.
I have infosys shares, received dividend of 8300 ( approx ). where should I mention this dividend income in ITR2.
Request you to suggest.
Hi
I am a Ph.D. scholar getting 31000 per month scholarship. If I do invest in equity shares, how much tax I have to file.
Hi Ganapathi,
I have long term loss of 12000 around, I need to fill ITR2, do I need to fill long term loss or not in ITR2.
I have infosys shares, received dividend of 8300 ( approx ). where should I mention this dividend income in ITR2.
Please fill the details of Long Term Loss of 12K; then only you can carry forward.
With regards to Dividend Income – you need to mention under Schedule EI (Details of Exempt Income) – #2 “Dividend Income from Domestic Company”
Hi Pankaj Pathak,
I am a Ph.D. scholar getting 31000 per month scholarship. If I do invest in equity shares, how much tax I have to file.
Any profit earned through equity shares is categorized under capital gains which is further divided into
AA] Long Term Capital Gain – It is taxed at 10% for gains gains exceeding Rs 1 Lacs.(It is exempt upto Rs 1 Lacs). Here; holding period is more than 1 year.
BB] Short Term Capital Gain – It is taxed at 15%. Here, holding period is less than 1 year.
I am a housewife and there is no source of Income. I opened my demat account in year 2008. Since then I kept my savings time to time on stock market. Now my investments around Rs 11 lac. But its market value is around 9 lac due to losses. I have never ever filled ITR. However I had done some short term trades in which there was some gains but overall in loss. What should I do now. Please suggest which ITR should I file? Is is mandatory to efile in my case? please mention!! Since time period is very short (31 Dec 2020) Hoping for early reply from you please. Thanks.
Hi Nithin,
I’m a employee and CTC is 5LPA.
I invested in shares and withdrawn from Zerodha around 50000.
Do I need to file this shares in ITR?
Hi Sir,
I have no salary. Total income is less than 2.5 lakhs.
Total Income ( STCGain + Interest) = 92000.
Long Term capital LOSS of around 12000.
Which Form I should submit.
And I don’t want to claim long term capital loss as I am not investing in equities any more.
Can I ignore mentioning in the returns as there seems to be some fair value concept for long term investments which I could not understand much ? Request you to suggest.
Respected sir,
I Palash Sarkar have filed ITR3 for AY 2020-2021 in xlsm format.
In part B-TI-TTI sheet when I click on SAVE XML ,the file saved in only 143 kb.and while I tried to upload the file on the income tax web site the system shows the massage ” invalid XML.please generate XML again using the latest utility” What can I do please help me.
Thanking you,
Palash Sarkar
HI Sir,
I have No salary income.
Short Term Capital Loss 41000 ( approx )
Interest around 82000
No F&O and No Intraday ( No speculation )
Please let me know which form I should fill in, and also is auditing needed in this case.
Request you to suggest Please ?
I have salary income of 3 Lakhs.
Short Term Capital Loss of (25000) – loss
only delivery trading
No Intraday or F&O
Don’t want to carry forward losses as it needs audit, can I declare 8% profit for STCG instead of loss on turnover and file ITR 2?
Please suggest which ITR form should I be submitting ?
Hi Devina,
I have never ever filled ITR. However I had done some short term trades in which there was some gains but overall in loss. What should I do now. Please suggest which ITR should I file? Is is mandatory to e-file in my case? please mention!! Since time period is very short (31 Dec 2020) Hoping for early reply from you please. Thanks
Please file ITR-2 and carry forward the loss. It will be useful in future years wherein the loss can be set off against gains.
If your gross income is below the threshold limit of 2.5 Lacs – it is optional to file the return. However, in your case – it is suggested to file the return.
Hi Sarathv,
I’m a employee and CTC is 5LPA.
I invested in shares and withdrawn from Zerodha around 50000.
Do I need to file this shares in ITR?
If you have earned any income from shares – then, please file the income tax return.
Hi Ganapathi,
Total Income (STCGain + Interest) = 92000.
Long Term capital LOSS of around 12000.
AA] Which Form I should submit – You need to file ITR2; Declare STCG under Schedule CG and Interest under Schedule OS.
BB] And I don’t want to claim long term capital loss as I am not investing in equities any more.
Can I ignore mentioning in the returns as there seems to be some fair value concept for long term investments which I could not understand much ? Request you to suggest.
Yes, you can ignore but however it is suggested to include loss and file the return.
The concept of FMV comes into picture if you have bought the shares before 31st Jan 2018. Earlier, LTCG was completely exempt. Now it taxable @ 10 exceeding 1 Lacs. The grandfathering clause was introduced; as per the same – the cost of acquisition will be calculated as the higher of:
AA] The actual COA of such investments; and
BB] The lower of-
1) Fair Market Value (‘FMV’) of such investments; and
2) Actual Sale price
Hi Palash,
have filed ITR3 for AY 2020-2021 in xlsm format.
In part B-TI-TTI sheet when I click on SAVE XML ,the file saved in only 143 kb.and while I tried to upload the file on the income tax web site the system shows the massage ” invalid XML.please generate XML again using the latest utility” What can I do please help me?
Please download the latest ITR utility; then load the earlier saved Xml and save it. After saving; try uploading in Income Tax Website.
Hi Nikhil,
I have no salary income. Short Term Capital Loss 41000 (approx)
Interest around 82000.
No F&O and No Intraday ( No speculation )
Please let me know which form I should fill in, and also is auditing needed in this case.
Please file ITR-2; Declare the Short Term Capital Loss under Schedule CG and Interest under Schedule OS.
Hi Santhosh,
I have salary income of 3 Lakhs. Short Term Capital Loss of (25000) – loss (only delivery trading)
No Intraday or F&O. Don’t want to carry forward losses as it needs audit, can I declare 8% profit for STCG instead of loss on turnover and file ITR 2?
Since you have done FNO and Intraday – Declare Short Term Loss under Schedule CG in ITR-2; There is no question of Audit here as it is Short Term Capital Loss.
Dear Nithin Kamath,
Thank you for a great article.
My salary is less than 2.5 lakh.
Intraday trading loss -Rs 30,000
Options trading profit (Not intraday, Delivery based) – Rs 2,400,000 (24 lakh)
Which form I should use?
Thank You
Hi Sreekanth K,
My salary is less than 2.5 lakh.
Intraday trading loss -Rs 30,000
Options trading profit (Not intraday, Delivery based) – Rs 2,400,000 (24 lakh)
Please use ITR-3. Declare Salary under Schedule S, Intraday Loss and Options Trading Profit under Schedule PL. Also fill Schedule BS.
Respected sir,
If my salary income is less than 5,00,000 , profit from Intraday trading is only rs 55 and STCG is on loss..then what will be the tax ?
Hi Palash,
my salary income is less than 5,00,000 , profit from Intraday trading is only rs 55 and STCG is on loss..then what will be the tax ?
Tax will be Zero because you can claim rebate under section 87A.
If income is from only trading and is more than 2.5 lakh against more than 1 crore turnover. Is it required to file itr3.
Can tax saving schemes be used to save tax like lic; atal pension scheme ; ppf etc
Dear Team,
I have a salary of 12 lac. I carried STCL of approx 3000 from previous AY. Made a profit (STCG) of approx 5000 this year and a loss in intraday trading of 10000 (turnover of 23000). Please let me know which ITR form should i use for AY 20-21.
Thanks
Hi Sumitra,
If income is from only trading and is more than 2.5 lakh against more than 1 crore turnover. Is it required to file itr3.
Can tax saving schemes be used to save tax like lic; atal pension scheme ; ppf etc
Yes, you need to file ITR-3. Also, you can claim deductions under Chapter VI-A to reduce income and in turn save tax.
Hi Harinder,
I have a salary of 12 lac. I carried STCL of approx 3000 from previous AY. Made a profit (STCG) of approx 5000 this year and a loss in intraday trading of 10000 (turnover of 23000). Please let me know which ITR form should I use for AY 20-21.
You need to use ITR-3. Further declare Salary Income under Schedule S, Speculative Income under Schedule PL(#65), Capital Gains under Schedule CG(#A3).
Also declare carried forward loss of Rs 3K under Schedule CFL so that it gets adjusted against current year STCG of 5K.
My F&O loss is rupees -1,35,583/-. My F&O turnover is rupees 50 lakhs. I have other income of rupees 2,25,841/-.
1) what business code should I select for F&O business under the nature of business in form itr 3?
2) In ITR 3 form, where should I show F&O turnover and F&O loss?(i.e. under which schedule or part, I need to show F&O turnover and F&O loss)
Hi Chirag,
My F&O loss is rupees -1,35,583/-. My F&O turnover is rupees 50 lakhs. I have other income of rupees 2,25,841/-.
AA] what business code should I select for F&O business under the nature of business in form ITR 3? – Select 13010 – Investment Activities.
BB] In ITR 3 form, where should I show F&O turnover and F&O loss?(i.e. under which schedule or part, I need to show F&O turnover and F&O loss) – You need to fill details in Schedule PL, Trading Account and Balance Sheet . Update Sale and Buy Value of Premiums under in Schedule Trading Account; Expenses related FNO Business in Schedule PL and Details of Assets and Liabilities in Schedule BS .
i’ll explain one scenario, then you’ll get that how other CA’s are misguiding novice retailer traders :
In FY 2019-2020 .
Salary 1.5 Laks
Total turnover from speculative + non ( FnO) : 28 lakhs .
LOSS from Speculative is 0.5 Lakhs and Loss from Non-Speculative is 4 lakhs . quite significant for retail traders
here they are not guiding us to to file ITR 3 which is good to carryforward our losses , instead asking us to select ITR4 on presumptive basis where forecefully considering profits 6% on Turnover (1.7 Lakhs ) . this is injustice to the small traders who can’t carryforward lossses ( digital transactions/ stock market trading ) without auditing. finally forced to file itr4. quick and easy to file within 5-10 minutes. Our losses are not kept in record. its gone
Hi Murali,
You can still file a revise return for FY 2019-20.
Please share what details you require for filing ITR-3. We will guide you. Thanks.
No salary income
Intraday+short term trading
4 cr turnover
Overall Loss 7.50 lacs
Can zerodha will start/recommend audit firms In helping tax return only for market trading purpose??
I have only bank interest income of about Rs.20,000. I did intraday trading, with overall loss. I have loss in delivery trade too for shares bought and sold within same financial year. Which ITR should I file? Filing IT returns is too complicated. Better not to trade at all.
Hi Sushil,
No salary income
Intraday+ Short term trading 4 Cr turnover
Overall Loss 7.50 Lacs
You need to file ITR-3; There is no requirement of audit as your turnover is less than the threshold limit.
Declare Intraday details under Schedule PL and Short Term Capital Gains details under Schedule CG.
Hi Antony,
I have only bank interest income of about Rs.20,000. I did intraday trading, with overall loss. I have loss in delivery trade too for shares bought and sold within same financial year. Which ITR should I file? Filing IT returns is too complicated. Better not to trade at all.
You need to file ITR-3; Declare Intraday details under Schedule PL and Capital Gains details under Schedule CG(Short Term) and 112A(Long Tern) as applicable.
Declare Interest Income under Schedule OS.
Respected sir,
I, Palash Sarkar , have some short term capital gain. Can I include the DP charges to the “expenditure wholly and exclusively in connection with transfer” coloumn in Short term capital gain?
Hi Palash,
Have some short term capital gain. Can I include the DP charges to the “expenditure wholly and exclusively in connection with transfer” column in Short term capital gain?
Yes, you can include the DP charges.
Is the module up to date?
Sir, My gross salary is 460000 pa and net salary is 380000 pa (after deductions). I am an investor and buy shares on Zerodha for long term. While buying shares, I accidentally placed order as MIS and sold immediately after that on realising my mistake. I got gain of Rs 9 only. I am not a trader. I am confused now if I should disclose this in ITR 3 now.
Hi Sunny Negi,
My gross salary is 460000 pa and net salary is 380000 pa (after deductions). I am an investor and buy shares on Zerodha for long term. While buying shares, I accidentally placed order as MIS and sold immediately after that on realizing my mistake. I got gain of Rs 9 only. I am not a trader. I am confused now if I should disclose this in ITR 3 now.
Going by provisions, you need to declare it as speculative income and file ITR-3.
However, since it is a small amount of Rs 9 and if you are not going to do speculative trading again; you can either ignore or declare it under other source and file your return.
From taxability point of view – both income from other sources (other than those taxable at special rates) and speculative gains are taxable as per applicable slab rates;
Hi,
Actually am filing my ITR 1 form from last 5 AYs, this year i invested in shares through Zerodha and bought SGB too. should i continue to file ITR2 or else other forms. I did not done any intraday trading till now, is it vary if i do intraday or not.
Please reply
Thanks in advance
Hi Naveen Kumar,
Actually am filing my ITR 1 form from last 5 AYs, this year I invested in shares through Zerodha and bought SGB too. Should I continue to file ITR2 or else other forms? I did not do any intraday trading till now, is it varies if I do intraday or not?
It is optional to declare the investments in ITR-2 or 3 as applicable if your income is less than Rs 50lacs. If you do Intraday and earn any income or incur loss – you need to file ITR-3.
Further,
A] If you are having total income less than Rs 50 Lacs consisting of Salary Income, Rental Income from one property, Income from other sources like Interest etc., and agricultural income upto Rs 5K – Use ITR-1. It is not applicable if you are director in a company and you are invested in unlisted equity shares.
B] ITR-2 if you are having Capital Gains.
C] ITR-3 if you are having FNO Income and Intraday Gains.
Hi
Nice material easy understandable but I have one doubt. I understood that income on shares will be added to my income, I falls under 10% slab. Whether STCG tax rate is flat 15% or my income slab of 10% if I files ITR3. Please clarify
Hi E Thulasi,
I understood that income on shares will be added to my income, I falls under 10% slab. Whether STCG tax rate is flat 15% or my income slab of 10% if I file ITR3?
STCG is taxable at 15%; irrespective of the slab in which you fall.
1. A govt employee can do intraday trading.
2. I have salary income below tax limit & i have STCG & LTCG , intraday trading loss & f&o loss with 10 lakh turnover then should i file itr3.
3. I have loss in intraday then i dont want audit so what should i do.
Hi Arvind,
AA] A govt employee can do intraday trading – No Government servant shall speculate in any stock, share or other investment: Provided that nothing in this sub-rule shall apply to occasional investments made through stockbrokers or other persons duly authorized and licensed or who have obtained a certificate of registration under the relevant law. Refer this for more info (page 12 – point 16) https://dopt.gov.in/sites/default/files/CCS_Conduct_Rules_1964_Updated_27Feb15_0.pdf
BB] I have salary income below tax limit & I have STCG & LTCG , Intraday trading loss & f&o loss with 10 lakh turnover then should I file itr3? – Yes, you need to file ITR-3. Declare Salary Income under Schedule, Capital gains under Schedule CG(STCG) and 112A(LTCG) and Intraday and FNO under Schedule PL.
CC] I have loss in intraday then I don’t want audit so what should I do? – If your turnover is less than the threshold limit, then no audit is required to carry forward loss.
M user of Zerodha from last 2 years. In the current financial year i have earned 10k profit in intraday and 1.50 lakhs profit in trading ( mostly BTST). Can you please advise for form should i file for ITR. Your valuable help is highly appreciated.
Thanks,
Amol shinde
Hi Amol Shinde,
In the current financial year I have earned 10k profit in intraday and 1.50 lakhs profit in trading ( mostly BTST). Can you please advise for form should I file for ITR.?
You need to file ITR-3. Declare Intraday Gains 10K under Schedule PL and BTST(if treated as Capital Gains) under Schedule CG.
With regards to treatment of BTST gains, there are both schools of thought; one which considers it to be speculative because no delivery was taken and the second school considers 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.
Hi Amol Shinde,
In the current financial year I have earned 10k profit in intraday and 1.50 lakhs profit in trading ( mostly BTST). Can you please advise for form should I file for ITR.?
You need to file ITR-3. Declare Intraday Gains 10K under Schedule PL and BTST(if treated as Capital Gains) under Schedule CG.
With regards to treatment of BTST gains, Refer 5.6 https://zerodha.com/varsity/chapter/taxation-for-traders…
I have CTC of 11L and earned 10L in intraday, btst and FNO, please tell a) what will be my tax amount?
b) How do I minimize it so that I have to pay least amount of tax?
c) Should I declare trading gain as business income and can I then show laptop cost, advisory fee paid to some person as my expenditure to reduce the tax?
Thanks in advance.
I have just started and earning around 2000 everyday from intraday but my traded value is going around 5 lakhs every day will I have to file itr
HI Anu,
I have CTC of 11L and earned 10L in Intraday, BTST and FNO, please tell
AA] what will be my tax amount? – Salary, Intraday Gains and FNO Incomes are taxable as per the slabs applicable. Salary Income has many allowable deductions..[If salary breakup is available; we can determine the tax amount; Similarly – 10Lacs breakup of Intraday, BTST and FNO] – Please use this calculator…https://www.incometaxindia.gov.in/pages/tools/income-tax-calculator.aspx
BB] How do I minimize it so that I have to pay least amount of tax? – You can claim deductions under 80C if you have made any tax saving investments or payments like(school fees, housing loan repayment etc.,). Also under 80CCC(1B) – 50K under pension scheme.
CC] Should I declare trading gain as business income and can I then show laptop cost, advisory fee paid to some person as my expenditure to reduce the tax? – If you declare gain as Business Income – You can claim depreciation on laptop, advisory fees as expenses and reduce your income which inturn reduces your tax liability.
Hi Lokesh,
I have just started and earning around 2000 everyday from intraday; but my traded value is going around 5 lakhs every day will I have to file ITR?
You need to file ITR-3; Declare Intraday Income under Schedule PL (#65 – Speculative details).
No stable income as of now,
I used to work ,now I am completely involved in f&o trading,
I have faced total loss of 3.3 lakhs from past 2 years including equity, intraday trading, options,I didn’t know about filing ITR ,do I need to file itr 3 ,what should I have to mention as income (please reply to this question),I have been trading with the money I have saved from my earlier job.
Hi Lastjedi,
I used to work ,now I am completely involved in f&o trading,
I have faced total loss of 3.3 lakhs from past 2 years including equity, intraday trading, options, I didn’t know about filing ITR ,do I need to file ITR 3 ,what should I have to mention as income (please reply to this question),I have been trading with the money I have saved from my earlier job.
Yes, you need to file ITR-3. File the return and carry forward the loss. You can set it off in future years.
I m govt. Employee my salary is 4 lakh per anum.
Short term equity gain₹ 66000
Options gains ₹ 34000
Delivery gains in portfolio ₹32000
Out of 3.09 lakh
Mutual fund gain ₹52000
I fill itr 4 before trading ,now what itr form should be fill ?
Need to audit or not??
Plz reply.
Sir, I am a house wife. I do only investment in market. I received dividend income after deduction of TDS which is below 1L. No other income except short term gain. which IT form I need to file for refund of TDS. Please educate.
Hi Deepak Raz,
Salary Income is 4 lakh per annum.
Short term equity gain₹ 66000
Options gains ₹ 34000
Delivery gains in portfolio ₹32000
Out of 3.09 lakh
Mutual fund gain ₹52000
I fill ITR-4 before trading ,now What ITR form should be fill ?
Need to audit or not??
Applicable ITR Form is ITR-3.
Declare Salary Income under Schedule S, Short Term Capital Gains under Schedule CG and LTCG(Equity & MF) under 112A.
Options (FNO Income) under Schedule PL.
Turnover depends on your turnover. If it exceeds the threshold limit of Rs 5 Crore, then Audit is applicable.
Hi Rekha,
I am a house wife. I do only investment in market. I received dividend income after deduction of TDS which is below 1L. No other income except short term gain. Which ITR form I need to file for refund of TDS?
Use ITR Form – 2; Declare the Dividend Income under Schedule OS and Short Term Capital Capital under Schedule CG.
You will get the refund after adjustment of tax payable on short term capital gain(net).
Sir, ITR 1 & 2 are for salaried person but I have no income from salary. Will it be correct for me even if I am non salaried ?
Hi Rekha,
ITR 1 & 2 are for salaried person but I have no income from salary. Will it be correct for me even if I am non salaried ?
Yes, you can go for ITR-2. Because in ITR1 – there is no option to declare and to file ITR-3 you need to have business income.
Sir my total Salary income is 175000 per year and trading in share (Long and Short Term) can i pay income tax or not and i required ITR filing and Which form I have to choose?
Hi Shiv,
Sir my total Salary income is 175000 per year and trading in share (Long and Short Term) can i pay income tax or not and i required ITR filing and Which form I have to choose?
Use ITR-2. Declare Salary Income under Schedule S, LTCG under Schedule 112A and STCG under Schedule CG.
If your overall income is less than basic exemption limit – filing of income tax return is optional.
Hi Nitin,
I’m in an internship period so my salary is below 2,50,000. As a newbie, did some small intraday trades gets profit of 1000 and equity delivery trades earn gains of nearly 3000.
Now I’m not sure if my total income is below 2,50,000 ,is it really necessary to file ITR
or if I’ve to then i guess ITR 4 would be the best option for me for my situation?
Thank You in advance
Hi Vibhor,
I’m in an internship period so my salary is below 2,50,000. As a newbie, did some small intraday trades gets profit of 1000 and equity delivery trades earn gains of nearly 3000.
Now I’m not sure if my total income is below 2,50,000 ,is it really necessary to file ITR
or if I’ve to then i guess ITR 4 would be the best option for me for my situation?
Filing of Income tax is optional if your overall income is less than Rs 2.5 Lacs.
If it crosses the limit of Rs 2.5 Lacs – applicable ITR in your case is ITR-3.
Thanks again for your help….
For example my salary is 4.72 lakh and income from trading (stcg) is 3.00 lakh during fy 2020-21 (ay 2021-22). My savings for exemption are already 1.50 lakh. i) How much tax I have to pay.
i) Which itr form is to filled for e-filing thr return.
Please reply urgently.
Hi Krishan Kumar Chugh,
For example my salary is 4.72 lakh and income from trading (stcg) is 3.00 lakh during fy 2020-21 (ay 2021-22). My savings for exemption are already 1.50 lakh.
A] How much tax I have to pay? – You cannot adjust Chapter VI-A deductions against Short Term Capital Gains. Assuming your taxable salary income excluding standard deduction of 50K is 4.72 Lacs.
Taxable Salary Income after Chapter VI-A deductions is 3.22 Lacs. ( Rs 4.72Lacs minus 1.5Lacs)
Taxable Short Term Capital Gains is Rs 3 Lacs.
Tax on Salary Income – Rs 3600 (5% on 72K) (Upto 2.5 Lacs – Zero Tax)
Tax on STCG @ 15% – Rs 45000
4% cess on 48600 = Rs 1944
Total Tax = 50544
B] Which ITR form is to filled for e-filing return? – You need to use ITR-2 for filing the Income tax return.
Sir, ITR for Fy20-21(21-22)
-my pension income 4.5lac
-Doing trading, delivery based intraday. Short Term Capital gain about 60k.
– Do not know about Turnover. In a FY it may be more than 1 crore.
which form to submit ITR3 ?
Hi DC Jain Sir,
My pension income 4.5lac
Doing trading, delivery based intraday. Short Term Capital gain about 60k.
Do not know about Turnover. In a FY it may be more than 1 crore.
Which form to submit ITR3?
Yes, you need to file ITR-3. Declare Pension Income under Schedule S, Short Term Capital Gains under Schedule CG, and Intraday Gains under Schedule BS and PL as applicable.
Hello sir,
I’m a non salaried person and no other source of income, I have started trading from last year and have some profits and losses.
STCG from investments in stocks: 88k profit
Equity Intraday loss -5800
F&O loss -17600
Turnover 359,268
Today I have filed ITR using quicko provided by zerodha and automatically it opted me ITR 1 form and filed it..
Now after researching about ITR forms I got to know that I should file ITR3 form..
Now what should I do? or itr1 is correct for me?
Hello sir,
I am only doing intraday trading i have no other source of income my overall profit is 2000 should I need to file ITR
My wife having income as a gift from me, STC loss and LTCG. Total
taxable income < 250k, does she need to file ITR2?
Hi Praveen,
STCG from investments in stocks: 88k profit
Equity Intraday loss -5800
F&O loss -17600
Turnover 359,268
Today I have filed ITR using quicko provided by zerodha and automatically it opted me ITR 1 form and filed it..
Now after researching about ITR forms I got to know that I should file ITR3 form..
Now what should I do? or itr1 is correct for me?
You need to file ITR-3; Declare STCG under Schedule CG, Intraday Loss and FNO Loss under Schedule PL.
Now you can revise the income tax return filed.
Hi Manish,
I am only doing intraday trading i have no other source of income my overall profit is 2000 should I need to file ITR?
You need to file ITR-3.
Hi Urbashi Jha,
My wife having income as a gift from me, STC loss and LTCG. Total taxable income < 250k, does she need to file ITR2?
Since total consists of STC Loss, LTCG and Gift – yes, you need to file ITR-2. However, it is optional as overall income is less than the basic exemption limit.
Do I need to file an income tax return if my capital gain is rupees 500 only in Financial yer
Hi Tanush,
Do I need to file an income tax return if my capital gain is rupees 500 only in Financial year?
If your overall income is less than Rs 2.5 Lacs – then filing of income tax return is optional.
Hi
I have 2 questions please…
I have salary, interest and STCG as income so I guess it will be ITR3 for me. Confusion is can ITR 1 be files treating STCG as ordinary income and not business income? If yes, then how this should be done?
Second question is if I file ITR3, can I claim expenses (even though I am salaried) such as telephone, travel, internet, etc since I will be showing STCG as business income?
Thanks in advance for response
Hi Nithin Sir,
Do you have any idea if there’s any opening in research role at True Beacon for a CA Fresher ? Can you set up an interview for the same since I want to work with Nikhil Sir and Team. I have already forwarded my resume at careerstruebeacon.
Please help me with regards to this.
Thanks.
Sir
I have lost my job in May 2020 and since then I am trading in F&O. My income is : Salary ( For Apr & May 2020) – Rs.3,30,000, Rent received- Rs.96,000, and profit from Trading in F&O Rs.9,88,000 (excluding STT and all other charges) . My query is as follows :
1. Should I treat my F&O income as Business Income or Capital Gain.
2. Am I entitled to get the benefit of STT paid by reducing my Profit.
3. My Turnover is 93 lakhs as per the calculations of Zerodha, so can I use the presumptive income and consider only 6 % as taxable income.
4. Which ITR Form should I use .
Waiting for a positive reply from your end
Hi Rahul Mukherjee,
My income is : Salary ( For Apr & May 2020) – Rs.3,30,000, Rent received- Rs.96,000, and profit from Trading in F&O Rs.9,88,000 (excluding STT and all other charges) . My query is as follows :
AA] Should I treat my F&O income as Business Income or Capital Gain – You need to treat F&O Income as Business Income.
BB] Am I entitled to get the benefit of STT paid by reducing my Profit – Yes, STT paid can be claimed as expense.
CC] My Turnover is 93 lakhs as per the calculations of Zerodha, so can I use the presumptive income and consider only 6 % as taxable income – Yes, you can opt for presumptive taxation scheme.
DD] Which ITR Form should I use – You need to use ITR3.
No Salary income.
Intraday / Delivery equity income as,
1. 2.5 lk income , which ITE to file ?
Hi SBP,
Intraday / Delivery equity income as,
1. 2.5 lk income , which ITE to file ?
You need to use ITR-3. Declare Intraday under Schedule PL and Capital Gains(Delivery Equity) under Schedule CG.
How to get all the details of sales and purchase of shares (trades) in zerodha demad account to know actual amount of intraday trades and delivery based trades for filling an ITR ??
Hi Lalit Lakhekar,
How to get all the details of sales and purchase of shares (trades) in zerodha demad account to know actual amount of intraday trades and delivery based trades for filling an ITR ??
You will get all the details in console…..https://console.zerodha.com/
Hello,
I’m a salaried employee and get around 3.5 lacs as in hand salary for this FY and even have a 1.5 lacs of intraday loss in f&o so should I use ITR-3 or 4 so that I can carry forward this loss for the next year.
Thank you
Hi Sai Shiva Sandupatla,
I’m a salaried employee and get around 3.5 lacs as in hand salary for this FY and even have a 1.5 lacs of intraday loss in f&o so should I use ITR-3 or 4 so that I can carry forward this loss for the next year.
You need to use ITR-3. FNO is always Business Income irrespective of being Intraday transactions.
You need to prepare books of account in order to carry forward the loss.
I am a central government salaried person having some investment in Mutual funds and shares (stocks). No capital gain or lose as I did not sell any stocks or Mutual fund units. What Should I submit ITR 1 or ITR 2 ? Please answer…
Say the difference of Investment and trading business in stock market …
Hi Rlk Sadhu,
I am a central government salaried person having some investment in Mutual funds and shares (stocks). No capital gain or lose as I did not sell any stocks or Mutual fund units. What Should I submit ITR 1 or ITR 2 ? Please answer… You need to file ITR-1 as there is no capital gains. If your income is more than 50 Lacs – you need to file ITR-2 and declare the details of Investment in Schedule AL
Say the difference of Investment and trading business in stock market …
A] Capital Gains from Investment are taxed @ 10% and 15% as applicable depending upon type of gain. Short Term are taxed @ 15% and LTCG @ 10%. If the gains are treated as Business Income – it is taxed as per the applicable slabs.
B] If you are declaring the gains as Income from Investment – you cannot claim STT as expense; if you are declaring the gains as Business Income – you can STT as expense.
Sir,
You are the inspiration to traders. I am lucky that I found zerodha as platform for trading and investing.
I am salaried employee in private IT company.
From Feb 2017, I started trading, and consistently booking losses from 2017 due to inadequate knowledge. Now Varsity platformed helped me a lot, and I am booking profits from last few months.
I was ignorent , that I have not filed my losses in ITR return forms, and I am filing ITR1 from 2018 before the due dates. I want to apply for revise the ITR returns for 2018-2019, 2019-2020 financial years. Can I apply for revise?
Regards,
Arun
Hi Arun Kumar,
I am salaried employee in private IT company.
From Feb 2017, I started trading, and consistently booking losses from 2017 due to inadequate knowledge. Now Varsity platformed helped me a lot, and I am booking profits from last few months.
I was ignorant , that I have not filed my losses in ITR return forms, and I am filing ITR1 from 2018 before the due dates. I want to apply for revise the ITR returns for 2018-2019, 2019-2020 financial years. Can I apply for revise?
For FY 2018-19; you cannot file revise return.
For FY 2019-20, the due date for filing revised return has been extended till May 31st – Please make use of this extension and the file the revised return.
Hello sir ,
I am govt employee , I have salary 521000 and short term capital gains 11700 and short term capital loss around 5000 for fy 2020-21.how to show trading income? Should I need to show trading income while filing income tax from my department and which itr form should I submit ? I missed to show trading income when I submit my form of income tax in my department fy 19-20……
Hi Shailendra,
I am govt employee , I have salary 521000 and short term capital gains 11700 and short term capital loss around 5000 for fy 2020-21.how to show trading income? Should I need to show trading income while filing income tax from my department and which itr form should I submit ? I missed to show trading income when I submit my form of income tax in my department fy 19-20…
For FY 2019-20; you still have the time to revise the return till 31st May 2021.
If you have only STCG and Salary – Please use ITR-2. Declare Salary under Schedule S and STCG under Schedule CG.
If you have Speculative Income , FNO along Capital gains & Salary income – Please use ITR-3. Declare Speculative Income and FNO under Schedule PL and BS as applicable.
I have salary income and for which tax is automatically deducted and paid to IT by the company. Along with this, though small, I have income from share sale(STCG) from FY 2017-18. After reading your notes, for the FY 2020-21, I will pay tax in the coming days. I would like to pay tax from the FY 2017-18 to 2019-20 also. How can I do that? Can you help on this?
Hi Anish,
I have salary income and for which tax is automatically deducted and paid to IT by the company. Along with this, though small, I have income from share sale(STCG) from FY 2017-18. After reading your notes, for the FY 2020-21, I will pay tax in the coming days. I would like to pay tax from the FY 2017-18 to 2019-20 also. How can I do that? Can you help on this?
Now, there is no option to revise the return. Suggest to pay the applicable tax on the capital gains along with the interest.
In future – if you receive any income tax notice; you can justify your action at that time.
My annual income in trading is less than 2.5lks.And i don’t have any other income source. Should I file ITR. And which ITR to be file.
I am above 60 years old and and I am drawing family pension 384000/year. If the long term capital gain comes more than 1 lakh but total income is less than 5 lakh then do I need to pay income tax ?
Hi Nagaraju,
My annual income in trading is less than 2.5lks.And i don’t have any other income source. Should I file ITR. And which ITR to be file.
If your overall income is less than basic exemption limit – filing of ITR is optional.
Hi Satheesh Sir,
I am above 60 years old and and I am drawing family pension 384000/year. If the long term capital gain comes more than 1 lakh but total income is less than 5 lakh then do I need to pay income tax ?
If income including LTCG before 1 Lac exemption is less than 5 Lacs, then no need to pay tax as you can claim rebate of max ₹12.5K under section 87A.
You will get standard deduction of ₹50K on your pension income; thereby reducing your pension to ₹334K; Tax on this pension income will be 5% on (334K-250K) = 5% on 84K = 4.2K
If your LTCG is less than 183K; there wont be any tax payable. [ 183K-100K(exemption)=83K; Tax on 83K will 10% i.e 8.3K.
Total tax will be 4.2K plus 8.3K = 12.5K for which you can claim rebate.
Sir, I am a psu govt employees with salary Rs470000/- . I have invested through zerodah in share till now I have short term capital gains of Rs20000/- in one year. What kind of itr form are needed to fill up by me?
Hi Subho Banerjee,
Sir, I am a psu govt employees with salary Rs470000/- . I have invested through zerodah in share till now I have short term capital gains of Rs20000/- in one year. What kind of itr form are needed to fill up by me?
You need to file ITR-2; Declare Salary Income under Schedule S and Capital Gains under Schedule CG.
Sir
In FY 2020-21 I had two source of income around 4 Lacs as salary income (For April and May after that I am not working) and around 7 Lacs from F&O Trading ( Taxation will be done as per presumptive income scheme) . My query is since Aug 2020 I am staying at a rented accommodation and paying rent of around 10,000 p.m . Can I claim this expense in my ITR and reduce my salary accordingly ? or I should not consider it since at the time of paying rent I was not employed and also using presumptive Income scheme. Further under presumptive income scheme , if I am considering 6% of my turnover as taxable income , can I reduce the taxable income by the STT expenses incurred during the trade.
Waiting for a positive response.
Regards
HI Anamika Mukherjee,
In FY 2020-21; I had two source of income around 4 Lacs as salary income (For April and May after that I am not working) and around 7 Lacs from F&O Trading ( Taxation will be done as per presumptive income scheme).
My query is since Aug 2020 I am staying at a rented accommodation and paying rent of around 10,000 p.m .
AA] Can I claim this expense in my ITR and reduce my salary accordingly?
You can claim rent paid as HRA exemption provided you should have salary income at the time of paying rent. Since you are not earning salary – you cannot this expense against salary income.
BB] or I should not consider it since at the time of paying rent I was not employed and also using presumptive Income scheme.
Yes, if the place used for trading purposes.
CC] Further under presumptive income scheme , if I am considering 6% of my turnover as taxable income , can I reduce the taxable income by the STT expenses incurred during the trade.
If you are opting for presumptive taxation scheme, all the expenses are deemed to be incurred. You cannot further deduct STT from the presumptive income.
Sir
I incurred a loss of rs 4 lakh in delivery trading.i should show this loss as business loss or capital loss.last year also I incurred 8 lakh loss and filed ITR as business income
Hi Deepak jauhari,
I incurred a loss of rs 4 lakh in delivery trading.i should show this loss as business loss or capital loss.last year also I incurred 8 lakh loss and filed ITR as business income
Since you have treated it as Business Loss last year. Please continue the same this year as well.
Hi Karthik,
In the FAQ – Can a return be filed after the due date?
You have mentioned -“A belated return can be filed within a period of one year from the end of the financial year or before completion of the assessment, whichever is earlier. ”
—But in example provided you have mention as below—
“For Example – In the case of income earned during FY 2013-14, the belated return can be filed up to 31st March 2016. However, if the return is filed after 31st March 2016, the penalty under section 271F can be levied”
Question 1:- 1 year from FY13-14 is 31st March 2015 only right ? But you have mentioned it as 31st March 2016.Can you please explain this point.
Question 2:- Why it is as “Income Tax Return filing” instead of “Income Tax filing”. What is the significance and meaning of the word ‘Return’ in this ! This has been running in my mind for long time 🙂
“
Hi chidambaram,
In the FAQ – Can a return be filed after the due date?
You have mentioned – “A belated return can be filed within a period of one year from the end of the financial year or before completion of the assessment, whichever is earlier. ”
—But in example provided you have mention as below—
“For Example – In the case of income earned during FY 2013-14, the belated return can be filed up to 31st March 2016. However, if the return is filed after 31st March 2016, the penalty under section 271F can be levied”
Question 1:- 1 year from FY13-14 is 31st March 2015 only right ? But you have mentioned it as 31st March 2016. Can you please explain this point ?
Law up to assessment year 2016-17 (FY 2015-16)
If you have not filed the return of income within the time allowed under Section 139 (1), then you may file/furnish the return of income at any time BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR or before the completion of assessment whichever is earlier.
Law effective from assessment year 2017-18 (FY 2016-17) (Finance Act 2016)
If you have not furnished/filed the return of income within the time allowed under Section 139 (1) then you may furnish/file the return of income AT ANY TIME BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR or before the completion of assessment whichever is earlier.
The example mentioned is prior to amendment.
Question 2:- Why it is as “Income Tax Return filing” instead of “Income Tax filing”. What is the significance and meaning of the word ‘Return’ in this ! This has been running in my mind for long time“
Both gives the same meaning more or less.
Hey,
My annual salary is less than ₹ 2.5 lac but tax is deducted on source. I used to file itr 1 to claim refund till FY20.
In FY21, I also have STCG.
Which itr should I file now?
Hi Parul,
My annual salary is less than ₹ 2.5 lac but tax is deducted on source. I used to file itr 1 to claim refund till FY20.
In FY21, I also have STCG.
Which ITR should I file now?
You need to use ITR-2; if you have salary and STCG.
SIr, i find it difficult to fill ITR -2 , can you elaborate how to show STCG, LTCG. I am a salaried employee, investing in Mutual Funds and realized some LTCG and STCG. Pl help.
Hi Kamal Kant Kaushik,
Sir, i find it difficult to fill ITR -2 , can you elaborate how to show STCG, LTCG. I am a salaried employee, investing in Mutual Funds and realized some LTCG and STCG. Pl help.
Declare Salary under Schedule S; STCG under Schedule CG #2 and LTCG under Schedule 112A.
Sir i am a government employ my salary is 700000per annum i have traded in f&o and my net loss is 750000 i also invested in equty delivery and got loss of1000000 what itr should i file also should i need to be audited
I’m salaried 10L pa
Trading loss 1.3 L
Which form I should fill
Hi Pardeep,
Sir i am a government employee my salary is 700000per annum i have traded in f&o and my net loss is 750000.
i also invested in equity delivery and got loss of 1000000. what itr should i file? also should i need to be audited?
You need to file ITR-3.
Since turnover of FNO is mentioned; applicability of tax audit can’t be commented. However, if your turnover is less than ₹ 10 Crores and if you have not opted for presumptive taxation scheme in last 5 years; then no tax audit is applicable.
Hi Dhara,
I’m salaried 10L pa; Trading loss 1.3 L. Which form I should fill?
You need to file ITR-3; the trading loss is relating to FNO/Derivatives;
If the trading loss is relating to capital gains; you need to file ITR-2.
I am housewife and I invested my savings in share market. My net income from short term investment in share market is Rs. 2.09 lacs and interest earned on FD is Rs. 22,000/-. Should I submit the ITR Form ? If yes, which one?
Thanks
Respected Sir,
I Palash Sarkar having a demat account in CDSL DP is ZERODHA. However, I applied for validate my demat a/c in profile in new income tax website.But now it shows validation failed due to name mismatch contact dipository to update the name as per PAN.What can I do now. Please suggest.
Thanking you.
Hi,
I have a income of 18 LPA from salary, 3 lakh from business/profession (educational sector) and 3 lakh from short term share trading in FY 20-21
1. Which ITR form should I fill?
2. Can i get concessions under 44A of the income tax act for expenses made for business/profession?
3. Will the Short term trading tax be at 15%?
Thanks,
Swapnil
Hi Bimla,
I am housewife and I invested my savings in share market. My net income from short term investment in share market is Rs. 2.09 lacs and interest earned on FD is Rs. 22,000/-. Should I submit the ITR Form ? If yes, which one
If your total income before Chapter VI-A deductions and before giving effect to capital gains exemptions(like Sec 54/54B/54EC etc.,) is less than basic exemption limit i.e ₹2.5 Lacs; then filing of income tax return is OPTIONAL.
It is OPTIONAL for you. Applicable ITR form is ITR-2.
Since TDS is deducted on FD interest, suggest you to file the return and get the refund.
Hi Palash Sarkar,
I Palash Sarkar having a demat account in CDSL DP is ZERODHA. However, I applied for validate my demat a/c in profile in new income tax website. But now it shows validation failed due to name mismatch contact depository to update the name as per PAN. What can I do now. Please suggest.
Please raise [email protected]
Hi Swapnil,
I have a income of 18 LPA from salary, 3 lakh from business/profession (educational sector) and 3 lakh from short term share trading in FY 20-21
AA] Which ITR form should I fill? – Applicable ITR form is ITR-3.
BB] Can i get concessions under 44A of the income tax act for expenses made for business/profession? – 44A is usually applicable incase of trade professional or similar association. However you can claim the expenses which can be apportioned to your professional income.
CC] Will the Short term trading tax be at 15%? – Yes, STCG are taxed @ 15%.
Respected sir,
I Palash Sarkar going to file IT return(ITR 3). Can you tell which version of windows in the system is required to support the IT return offline software?
Thanking you ..
I am salaried person. But I do invest in stocks mostly delivery based. Most of the time I hold stocks for more than year but I do sell some holdings with in a year. You can say 10-15 trade might be like that I will doing in a year. Do I need to show them as STCG or business income? Also which form I should use for filing ITR.
Thanks
HI Palash Sarkar,
I Palash Sarkar going to file IT return(ITR 3). Can you tell which version of windows in the system is required to support the IT return offline software?
Windows 7 or above, Linux and Mac will support.
HI Gaurav,
I am salaried person. But I do invest in stocks mostly delivery based. Most of the time I hold stocks for more than year but I do sell some holdings with in a year. You can say 10-15 trade might be like that I will doing in a year. Do I need to show them as STCG or business income? Also which form I should use for filing ITR.
ITR-3; if you are treating gains as Business Income.
ITR-2; if you are treating gains as STCG.
Based on the info provided, you can show it as STCG.
Sir, Govt. Employee, my gross annual income is 4.59 lac and short term gain is 500 Rs.. which itr suitable for me ?
Hi Kamlesh,
Sir, Govt. Employee, my gross annual income is 4.59 lac and short term gain is 500 Rs.. which itr suitable for me ?
Please file ITR-2.
Declare Salary Income under Schedule S and Short Term Gain under Schedule CG.
My Fixed Salary is 18.70 Lakhs and my employer would give the form 16.
I have long term capital gains in equities (have not sold anything yet but investment of 6 Lakhs with 1 Lakh as the profit). This is through demat account in icicidirect. I can take the statement from there.
For filing, my employer has a tie up with clear tax. So, when i am filling up my details with cleartax and if i mention about my equity investments, will they themselves file it as ITR3?
Hi Sivaramakrishnan,
My Fixed Salary is 18.70 Lakhs and my employer would give the form 16.
I have long term capital gains in equities (have not sold anything yet but investment of 6 Lakhs with 1 Lakh as the profit). This is through demat account in icicidirect. I can take the statement from there.
For filing, my employer has a tie up with clear tax. So, when i am filling up my details with cleartax and if i mention about my equity investments, will they themselves file it as ITR3?
Tax is paid only on realized gains.
Also, you have to give them capital gains statement for filing of return.
If you only Salary n Capital Gains – ITR-2 needs to be filed.
Sir i am salried person. Some share buy. Ple tell me whose itr fill
Hi
Sir i am salaried person. Some share buy. Pls tell me whose itr fill
File ITR-1; only salary.
File ITR-2; Salary and Capital Gains.
Respected sir,
I, Palash Sarkar going to file ITR3. I have a dividend of rs 34.In which source of income I have to show this?
Thanking you
Palash
Hi Palash,
I, Palash Sarkar going to file ITR3. I have a dividend of rs 34.In which source of income I have to show this?
Declare it under Income from other sources under Schedule OS.
Hi ,
I am salaried 12L and have traded in stocks and options have made gains of 35k in stocks and loss of 83k in options. Which ITR I need to file ?
Hi Amit,
I am salaried 12L and have traded in stocks and options have made gains of 35k in stocks and loss of 83k in options. Which ITR I need to file ?
You need to file ITR-3.
Is zerodha provide form 16 to the traders
Hi Brijesh Sharma,
Is zerodha provide form 16 to the traders?
No:)
If someone has income from agriculture and trading business (Intraday and delivery ), which ITR is appropriate ?
Hi Mayur Patel,
If someone has income from agriculture and trading business (Intraday and delivery ), which ITR is appropriate ?
ITR-3 is appropriate.
Respected sir,
Recently Zerodha is taking latest income update.I am a salaried person. The employer have not give Form 16 till now.How can I update my sarary?
Thanking you,
Palash Sarkar
Hi Palash Sarkar,
Recently Zerodha is taking latest income update. I am a salaried person. The employer have not give Form 16 till now. How can I update my salary?
There are other options also – you can upload salary slip/latest 6 months bank statement/demat holdings statement – you can try this..
I am working in pribvate sector with annual package 9.15 lakhs..I do both intraday and delivery..I do itr file for my salary ..Can you please advice is it mandatory to file itr separately for stock I am trading… Intraday loss 3000.. Delivery profit 11000
I am salaried person with 30% tax slab income and i have done intraday profit with STCG (No extra interest income or business come). I had carry forward my intraday/STCG loss last year by filling ITR-2 so, which ITR form(ITR-2 or 3 or 4) do i need to file for better future in current FY ? please suggest me with reason.
HI Biswaranjan Mohanty,
I am working in private sector with annual package 9.15 lakhs. I do both intraday and delivery.
I do itr file for my salary..Can you please advice is it mandatory to file itr separately for stock I am trading… Intraday loss 3000.. Delivery profit 11000
Since your income is above the threshold limit; you need to include your delivery profit and intraday loss and file the return.
Applicable form is ITR-3.
HI Rohit Patel,
I am salaried person with 30% tax slab income and i have done intraday profit with STCG (No extra interest income or business come). I had carry forward my intraday/STCG loss last year by filling ITR-2 so, which ITR form(ITR-2 or 3 or 4) do i need to file for better future in current FY ? please suggest me with reason.
If you have any intraday transactions; you need to use ITR-3.
Since you are a salaried with 30% tax slab; and have you Intraday profit. It is mandatory for you to file the return and pay tax.
In Previous Finacial Year , I mentioned Rs- 50000 Loss- Under Carry Forward Losses, So it it necessary again to mention in filling ITR in next year(As I wish, To drop – Carry Forwrad Losses.)
Hi Mayank Nayan,
In Previous Finacial Year , I mentioned Rs- 50000 Loss- Under Carry Forward Losses, So it it necessary again to mention in filling ITR in next year(As I wish, To drop – Carry Forwrad Losses.)
If you wish to drop the loss; you can ignore.
Hi,
I do job in private sector and my salary is 15lpa and I use to do intraday in f&o and I earn around 50k monthly. So ITR I have to file.
Thanks
Shashi
I am a client of Zerodha. I have earned Rs. 3000.00 in addition to stcg and ltcg during the FY 2020-21. Which ITR form to be used.
2. For the FY 2019-20. Itr 2 wasfiled before due date showing shows in share trading under stcg & ltcg. Some refund had claimed by me and it was allowed. But the loss reported was a little higher amount by mistake. Can I forget the loss and avoid carry forward in the ITR for fy 2020-21?
Sir, I have Income from Salary, Interests, Short term capital gains from trading in equity / shares and some income from professional (IT related) works. Which ITR should I file ? Please guide. Thanks.
HI Shashi Kant Sharma,
I do job in private sector and my salary is 15lpa and I use to do intraday in f&o and I earn around 50k monthly. So ITR I have to file.
You need to use ITR-3.
Hi Sivaraman,
AA] I am a client of Zerodha. I have earned Rs. 3000.00 in addition to stcg and ltcg during the FY 2020-21. Which ITR form to be used.
If 3K Income is relating to Business Income; then you need to file ITR-3.
If 3K Income is relating to Non – Business Income; then you need to file ITR-2.
BB] For the FY 2019-20. Itr 2 was filed before due date showing shows in share trading under stcg & ltcg. Some refund had claimed by me and it was allowed. But the loss reported was a little higher amount by mistake. Can I forget the loss and avoid carry forward in the ITR for fy 2020-21?
Yes you can avoid the excess loss. Also it is suggested to file rectification return to correct the mistake for FY 2019-20.
Hi Utsav,
I have Income from Salary, Interests, Short term capital gains from trading in equity shares and some income from professional (IT related) works. Which ITR should I file ?
You need to file ITR-3.
Sir, I have a single intraday trade in FY 20-21 with a turnover of Rs. 100 only. Can I show it as a presumptive business income under ITR-3 and offer 6% profit as taxable income?
Hi Vivek Kumar,
Sir, I have a single intraday trade in FY 20-21 with a turnover of Rs. 100 only. Can I show it as a presumptive business income under ITR-3 and offer 6% profit as taxable income?
Yes, you can declare under presumptive scheme.
sir, in itr3 iam enter no account case profit enter above 6% but same amount enter in expences so net profit is zero.it is liable to audit.
gross receipt which is subject to tax deduction … how to calculate or where I will get
HI Gopal,
Sir, in itr3 i am enter no account case profit enter above 6% but same amount enter in expenses so net profit is zero. It is liable to audit?
Please note checking of 6% profit is relating to net profit not gross profit.
Hi,
I am doing trading in equity only, in last financial year I have a profit of 600k(unable to segregate short term and long term gain), which ITR form should I fill?
Hi Arpan,
I am doing trading in equity only, in last financial year I have a profit of 600k(unable to segregate short term and long term gain), which ITR form should I fill?
If you are declaring it as Business Income – then you should file ITR-3.
Are you doing ITR submission for individuals. If yes what is your rate for submitting my files. I am doing some stock market trading and hence it needs to uploaded into their system
I have a salary income. Additionally I get dividends from stock investment, FD interest and I am also a mutual fund investor.
Which ITR form should I fill?
ITR 1 or ITR 2 or both? Please guide
i lost almost 25 lac in options which itr should i file ? i got this amount from my parents as a gift ?
HI Sandeep,
Are you doing ITR submission for individuals. If yes what is your rate for submitting my files. I am doing some stock market trading and hence it needs to uploaded into their system
Try https://quicko.com/
Hi Pallavi,
I have a salary income. Additionally I get dividends from stock investment, FD interest and I am also a mutual fund investor.
Which ITR form should I fill?
You need to file ITR-2.
Hi Arun,
i lost almost 25 lac in options which itr should i file ? i got this amount from my parents as a gift ?
Please file ITR-3. You can prepare books of accounts and carry forward loss.
Hello sir ,
I am a student and I do intraday on daily basis.
Sometimes I got loss and sometimes profit, I just want to know that if I am a student I have no job , and on daily basis I do intraday using margin ( 30,000 cash and with margin I buy 2 lakh amount shares ) . So I have to fill ITR form or not? I do intraday on Equity only.
My profit is almost 1k – 3k and loss is under 1k -2k
Please suggest what to do ? I am very confused and tensioned.
Hi Raj,
Sometimes I got loss and sometimes profit, I just want to know that if I am a student I have no job , and on daily basis I do intraday using margin ( 30,000 cash and with margin I buy 2 lakh amount shares ) . So I have to fill ITR form or not? I do intraday on Equity only.
My profit is almost 1k – 3k and loss is under 1k -2k
If the overall net profit is less than 2.5 Lacs; there will be no tax liability and it is optional to file Income Tax return.
Applicable ITR form is ITR-3.
Sir i am working in a public sector bank and my salary is 762513 yearly. This loss in my trading account Rs 19656 can i show to itr filing or not showing in itr filing
Hi Raghuveer,
Sir i am working in a public sector bank and my salary is 762513 yearly. This loss in my trading account Rs 19656 can i show to itr filing or not showing in itr filing
Suggest you to declare the loss and file the return.
Sir,
I am a retd Sr Citizen having mainly the interest income of Rs. 7.5 Lakhs and an intraday equity trading gain of just Rs. 800/- ( two transactions only).
Which ITR is supposed to be filed by me ? …. Thanks
Hi Vipin Jain Sir
I am a retd Sr Citizen having mainly the interest income of Rs. 7.5 Lakhs and an intraday equity trading gain of just Rs. 800/- ( two transactions only).
Which ITR is supposed to be filed by me ?
You need to file ITR-3.
i am retured person and have started trading in share market since Aug 20. Till Aug 21 I have earned about 25000 profit under trading . I have been filing ITR 1 every year though i have no tax to pay . Is it necessary now to file particular itr form other than ITR 1 as i m trading in share market ? please advise. .
Hi,
I am salaried employee working in private company (20% slab old regime). I do equity delivery, intra day and F&O as well where, my intraday is -25K (intraday turnover 63k), stcg is around 3L, Futures -35k and options -30k. I would like to carry forward my losses. I am confused if I have to file ITR2 or ITR3. Can you please let me know which ITR would be correct?
Thanks,
Hi Darshan,
I am salaried employee working in private company (20% slab old regime). I do equity delivery, intra day and F&O as well where, my intraday is -25K (intraday turnover 63k), stcg is around 3L, Futures -35k and options -30k. I would like to carry forward my losses. I am confused if I have to file ITR2 or ITR3. Can you please let me know which ITR would be correct?
You need to file ITR-3.
Hi, I am salaried person and do trading as well ,incurred a loss of 50K in equity and 1L in F&O , could you suggest which form I need to file.
Thanks
HI John,
Hi, I am salaried person and do trading as well ,incurred a loss of 50K in equity and 1L in F&O , could you suggest which form I need to file?
You need to file ITR-3; Declare equity loss in Schedule CG and FNO details in Schedule PL and BS as applicable.
Hi S,
Thanks for clarifying on ITR form. Just one more query related to my earlier question. Will be requiring to get tax audit if I have to carry forward my losses ? [my intraday loss is -25k (turnover 63k) and future loss -34k (turnover 35k) and options loss is -30k (turnover is around 9.67L
Hello Nithin,
My taxable income is: 276000
I made a profit of 52,750 as STCG in equity trading
I incurred a loss of 16,080 in F&O trading
My query:
1. Which ITR form is applicable in this scenario?
3. Is audit required considering my above income and loss?
Please assist with my queries.
Thank you
Hi Darshan,
Thanks for clarifying on ITR form. Just one more query related to my earlier question. Will be requiring to get tax audit if I have to carry forward my losses ? [my intraday loss is -25k (turnover 63k) and future loss -34k (turnover 35k) and options loss is -30k (turnover is around 9.67L
If you are not opting out of presumptive taxation in the current year; then tax audit is not applicable.
In other words – if you had opted for presumptive taxation scheme in the previous year, and now if you are opting out; then tax audit is applicable.
Hi Nithin/Team,
I have made these in FY 2020-21:
Intraday/Speculative profit 2820.55
Intraday/Speculative turnover 3945.35
Short Term profit (STCG) 23714.04
Long Term profit (LTCG) -6199.55(loss)
Options Turnover 36133.75
Options Realized Profit -3633.75 (loss)
Dividends 1580
Saving Account Interest 17860
Need your help in couple of questions I have.
1. I guess I have to use ITR3 in this case, right?
2. Am I supposed to get audited even for small loss of 3633 and turnover of 36133?
3. If yes for Q2, instead of loss can I show (presumptive) profit and pay tax according?
4. What if I file ITR2 not showing the F&O at all. In other words, is it an offence not to show F&O loss?
Just to add I have salary income too.
Hello Nithin please answer,
1. Total 1.6 lac salary received
2. Dividend income of 1.5 lac
3. Stcg loss of 88k
4. F&o profit of 21k, turnover is 89 lacs.
5. Intraday loss in equity is 3k.
Ques is
1. Which ITR should I file if I don’t want to carry losses?
2. Audit is required or not?
3. And balance sheet and p&l is necessary?
Please answer
Hi, I have an salaried (bank job) income of 6.6lakhs and other allowances. I do some swing trading now and then. Which ITR should I file? Can someone please help me
Hi Anjali,
My taxable income is: 276000
I made a profit of 52,750 as STCG in equity trading
I incurred a loss of 16,080 in F&O trading
My query:
AA] Which ITR form is applicable in this scenario? – Applicable ITR Form is ITR-3.
BB] Is audit required considering my above income and loss? – If you have incurred FNO loss for the first time; then Audit is not required. OR
If you are opting out of presumptive scheme in the current year; then audit is applicable.
Hi Venkatesh,
I have made these in FY 2020-21:
Intraday/Speculative profit 2820.55
Intraday/Speculative turnover 3945.35
Short Term profit (STCG) 23714.04
Long Term profit (LTCG) -6199.55(loss)
Options Turnover 36133.75
Options Realized Profit -3633.75 (loss)
Dividends 1580
Saving Account Interest 17860
Need your help in couple of questions I have.
AA] I guess I have to use ITR3 in this case, right? Yes, you have to use ITR-3.
BB] Am I supposed to get audited even for small loss of 3633 and turnover of 36133? That depends whether you have opted for 44AD presumptive taxation in the scheme in the previous year or not. If you are opting of presumptive scheme in the current year; then audit is NOT applicable.
CC] If yes for Q2(BB), instead of loss can I show (presumptive) profit and pay tax according? – Yes, you can presumptive profit @ 6% and pay tax accordingly.
DD] What if I file ITR2 not showing the F&O at all. In other words, is it an offence not to show F&O loss? – Yes ; further for misreporting of income; IT department can levy penalty.
Hi Karanpreet Singh,
1. Total 1.6 lac salary received
2. Dividend income of 1.5 lac
3. Stcg loss of 88k
4. F&o profit of 21k, turnover is 89 lacs.
5. Intraday loss in equity is 3k.
Ques is
AA] Which ITR should I file if I don’t want to carry losses? You need to file ITR-3 as you have FNO income.
BB] Audit is required or not? – No as your turnover is below the threshold limit.
CC] And balance sheet and p&l is necessary? – Yes, you need to prepare Balance Sheet and PL; if you declaring FNO income as per normal provisions of taxation.
Hi Vysakh,
Hi, I have an salaried (bank job) income of 6.6lakhs and other allowances. I do some swing trading now and then. Which ITR should I file?
You need to file ITR-3; if you are treating the gains from swing as Business Income.
You need to file ITR-2; if you are treating the gains from swing as Capital Gains.
Hi Team,
My Question is related to Tax audit for FY 2020-21.
For FY21 I am having F&O loss of 1.5 Lac (Turnover – 50 lac) and salary Income 8 lac . total taxable income (including salary) is more then basic exemption limit. (note: I was also having losses in previous years in F&O having turnover less than 1 Crore with salary income that leads total income more then basic exemption limit, and I had filed ITR 1 only during all previous FYs. not disclosed any loss related to share trading in return, First time want to show trading loss in return, that means never filed return under presumptive taxation 44AD).
1. Is tax audit is applicable on me for FY 20-21 ?
2. Which for do I need to file for return.
I’m a Govt employee having a gross salary of 12 lacs p.a. I do intraday and long term trading and there is a gain of 1.93 lacs from trading. Kindly suggest do I need to file ITR 1 after showing trading income as other income or other ITR file. If I don’t show trading income and only show salary income in ITR 1, is there any problem?
Hi after uploading Zerodha Tax P&L statement in Quicko, Nature of Business is mentioned as “09-Retail and Wholesale 09028-Retail Sale of Other Products” by default. Do I need to change it to “13010 – Financial intermediation/Investment activities” as mentioned in this document.
Hi Goru,
For FY21; I am having F&O loss of 1.5 Lac (Turnover – 50 lac) and Salary Income 8 lac . Total taxable income (including salary) is more then basic exemption limit. (note: I was also having losses in previous years in F&O having turnover less than 1 Crore with salary income that leads total income more then basic exemption limit, and I had filed ITR 1 only during all previous FYs. not disclosed any loss related to share trading in return, First time want to show trading loss in return, that means never filed return under presumptive taxation 44AD).
AA] Is tax audit is applicable on me for FY 20-21 ? – Tax audit is not applicable for you; since the turnover is below the threshold limit and you have never opted for 44AD.
BB] Which for do I need to file for return? If you want to carry forward your losses; you need to prepare books and file ITR-3.
Also, you have an option to declare minimum profit @ 6% and file ITR-4.
Hi Vivek Kumar,
I’m a Govt employee having a gross salary of 12 lacs p.a. I do intraday and long term trading and there is a gain of 1.93 lacs from trading.
AA] Kindly suggest do I need to file ITR 1 after showing trading income as other income or other ITR file – You need to file ITR-3 declaring your intraday transactions and long term cap gains.
BB] If I don’t show trading income and only show salary income in ITR 1, is there any problem? Yes, this amounts to under-reporting of income and penalty can be levied.
Hi Karthik,
Hi after uploading Zerodha Tax P&L statement in Quicko, Nature of Business is mentioned as “09-Retail and Wholesale 09028-Retail Sale of Other Products” by default. Do I need to change it to “13010 – Financial intermediation/Investment activities” as mentioned in this document.
Both are correct.
Good evening sir,
I filed ITR 3 for AY 2020-21 to carry forward loss of Rs.637000.00 (Short term).
This year (AY 2021-22) I made a profit of Rs.127000.00(short term).
Please advise me which ITR form should I fill this year to carry forward remaining loss of Rs.(637000-127000).
Hi Rupa Bhattacharyya,
I filed ITR 3 for AY 2020-21 to carry forward loss of Rs.637000.00 (Short term).
This year (AY 2021-22) I made a profit of Rs.127000.00(short term).
Please advise me which ITR form should I fill this year to carry forward remaining loss of Rs.(637000-127000).
You need to file ITR-2 if you don’t have any business income in the current year, otherwise ITR-3.
Further, you need to fill details of carry forward loss in Schedule CFL so that you can set off the same.
filed ITR 3 for AY 2020-21 to carry forward loss of Rs.637000.00 (Short term).
This year (AY 2021-22) I made a profit of Rs.127000.00(short term).
Please advise me which ITR form should I fill this year to carry forward remaining loss of Rs.(637000-127000).
Yes sir, I have interest income from FD in Bank and income from intraday trading also.
Is intraday trading a business income? Please guide sir.
Hi Rupa Bhattacharyya,
I have interest income from FD in Bank and income from intraday trading also.
Is intraday trading a business income?
Yes Intraday falls under the income head PGBP(Profits and Gains from Business or Profession). Pls file ITR-3 for the current year.
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.
As per above explanation from Zerodha platform – Audit is required because my turnover is less than 5 Cr. and having loss with salary income more that minimum exemption limit.
But you replied that – In my case audit is not required – could you please explain How?
Dear Sir,
I am 19 years old and this is my first year where I have generated an income.
I have following income (Profit and Loss as well) from trading (Intraday and short term) activities
1. Short Term Profit Rs. 72000
2. Intraday F&O Loss : Rs. 14000
3. Equity Intraday Loss : Rs. 11000
My total income is less than 2.5 Lacks and F&O turnover is also < 2 Cr
My question is :
1. Is it mandatory for me to fill ITR
2. If yes, which form I should fill.
Regards,
Ramesh Survanshi
We all ready pay it when sell and buy stock for example stt gst stamp duty dp charge tb bi hme or alg se tex pey krna padega
Hi Ramesh,
I am 19 years old and this is my first year where I have generated an income.
I have following income (Profit and Loss as well) from trading (Intraday and short term) activities
1. Short Term Profit Rs. 72000
2. Intraday F&O Loss : Rs. 14000
3. Equity Intraday Loss : Rs. 11000
My total income is less than 2.5 Lacks and F&O turnover is also < 2 Cr
My question is :
1. Is it mandatory for me to fill ITR – It is optional; but suggest you file the return.
2. If yes, which form I should fill – Applicable ITR is ITR3.
Good evening sir,
Can I file ITR3 online directly using new portal or should I prepare the return offline mode and then upload in the new portal,please advise.
Hi Rupa Bhattacharyya
Can I file ITR3 online directly using new portal or should I prepare the return offline mode and then upload in the new portal,please advise.
Both can be done; however suggest you to file online directly.
Sir, if I hold a share for lifetime, do I have to file incometax every year.
Sir, please reply.
Hi Jayanta,
Sir, if I hold a share for lifetime, do I have to file incometax every year.
You need to pay tax when you sell and make profit.
Also, when you receive Dividend.
Hi,
We know to avail presumptive scheme under 44AD, ITR4 can be used. However ITR3 also has sections to declare income under 44AD. So, can one use ITR3 and still avail presumptive scheme under 44AD for FY20-21?
I am not salarised person but intra day income about 50000 and short term gain about 300000 .what fill itr
Hi Sanjay,
I am not salaried person but intra day income about 50000 and short term gain about 300000 .what fill itr?
You need to fill ITR-3. Declare Intraday details in Schedule PL and STCG in Schedule CG.
Hi Moushmi,
We know to avail presumptive scheme under 44AD, ITR4 can be used. However ITR3 also has sections to declare income under 44AD. So, can one use ITR3 and still avail presumptive scheme under 44AD for FY20-21?
Yes, one can use ITR-3 and take benefit of Section 44AD.
Salary is 10 Lacs plus short term capital gain was 2 lacs and long term capital gain was 1.5 lacs intraday profit was 50000 and intraday loss was 45000 how can i fill income tax return please attach one excel file if possible.
How to carry forward F&o losses in new Itr portal, is it mandatory to compete tax audit
My wife is housewife, trading in share market (delivery based only). She want to file her IT Return for more than 5 lakh income for current year (2021-22).
She had B.Com degree & trading for last 12-13 years. But till this year she won’t generated profit more than 2.5 lakhs. So she not filed IT Returns yet.
I want to know which IT Return you will file for her? ITR 2 or 3?
Hi
My wife is housewife, trading in share market (delivery based only). She want to file her IT Return for more than 5 lakh income for current year (2021-22).
She had B.Com degree & trading for last 12-13 years. But till this year she won’t generated profit more than 2.5 lakhs. So she not filed IT Returns yet.
I want to know which IT Return you will file for her? ITR 2 or 3?
ITR 2 if you have delivery based trades. You need to fill the details in Schedule CG and 112A as applicable.
I have salary income around 9 lakh and I have invested in shares but I have not sold any one in that FY 20-21 then In that case do need to fill ITR 3 or ITR 1 will be fine? Only I received dividend.
HELLO SIR,
I AM A PENSIONER IN PSU BANK . MY PENSION AMOUNT ALONG WITH INTEREST & DIVIDEND INCOME IS WITH IN TAXABLE LIMIT. THIS YEAR, I REDEEMED SECURITIES UNDER ELSS AND MADE A LTCG OF AROUND
Rs. 26000/- ONLY , ie,WITHIN TAX EXEMTION LIMIT FOR LTCG
OF Rs.1 LAC.
CAN I FILE THE RETURN IN FORM ITR-1 OR ITR-2 THOUGH THE INCOME ALL PUT TOGETHER LESS THE TAX EXEMPTIONS SUCH AS SAVINGS UNDER
80 C, STANDARD DEDUCTION, INTEREST UNDER 80 TTB ETC .
THE QUESTION IS EVEN IF LTCG IS WITHIN THE EXEMPTION LIMIT, WHETHER ITR- 2 HAS TO BE USED OR ITR 1 WILL SUFFICE ?
IS
Hi Saurabh
I have salary income around 9 lakh and I have invested in shares but I have not sold any one in that FY 20-21 then In that case do need to fill ITR 3 or ITR 1 will be fine? Only I received dividend.
You need to file ITR-1. Declare dividend under Income from Other Sources.
Respected sir,
I Palash Sarkar going to file ITR3 .I have received ₹37 as dividend.Please suggest me in which column I can show this amount?
Thanking you
Palash Sarkar
Hi,
I Palash Sarkar going to file ITR3 .I have received ₹37 as dividend.Please suggest me in which column I can show this amount?
Please declare the Schedule Other Sources. (i) – Dividend Income [other than (ii)]
Respected sir,
I Palash Sarkar going to file ITR3 .In schedule capital gains ,the column F. information about accrual/receipt of capital gains.how can I file this?
Please suggest.
Thanking you
Palash Sarkar
Hi, I am a govt employee.i only invest in mutual fund .which itr I have to fill up??
Hi Sujan manna,
I am a govt employee. I only invest in mutual fund .which ITR I have to fill up??
ITR-1 because you have only invested in mutual fund.
If your salary income is more than 50 Lacs, fill ITR-2.
Hi Nithin,
My taxable income is 4,90,000 (0 tax due to rebate)
STCG is 13000
Intraday Loss is -5502(negative) on turnover of 4176274
Due to my STCG my total income is going above 5 lakhs thereby removing the rebate (17k tax)
Question 1 ->How is the total taxable income calculated ?
Is it => Salary + STCG + Intraday ? (if we add intraday losses to total income then tax liability is Rs 0 as income is Should i fill ITR-3 ? and if so then will i be able to save tax by showing Intraday losses ?
Thanks,
Shaan
HI Shaan,
My taxable income is 4,90,000 (0 tax due to rebate)
STCG is 13,000.
Intraday Loss is -5502(negative) on turnover of 41,76,274.
Due to my STCG my total income is going above 5 lakhs thereby removing the rebate (17k tax)
Question 1 ->How is the total taxable income calculated ?
Is it => Salary + STCG + Intraday? (if we add intraday losses to total income then tax liability is Rs 0 as income is Should i fill ITR-3 ? and if so then will i be able to save tax by showing Intraday losses ?
In your case, taxable income will be Salary + STCG because Intraday is speculative transaction;
Loss from Speculative(Intraday) cannot be set off against STCG.
Taxable Income will be Rs 490000+ Rs 13000 = Rs 503000/-
Also, you should fill ITR-3 in your case.
Hi sir,
can you please share the draft format of Financials for F&O trading updated ones,
and my client is having only income from Trading, what assets should be included in B/S and where should we report the B/s and P&L in ITR-3
Thanks
Sir my mom has house rent income and she earned LTCG from mutual fund of 98k(LTCG upto 1lakh is Exempted so i need to mention this on ITR Or not) in a financial year then which itr form to fill?
WhicH ITR to use for Salary Income, House Property Income, Other Sources viz Interest n Dividend Income, Inter day Loss on Shares, Intra day Profit and F&O Losses.
Thanks
Ankur Bhasin
9897999134
Hi Saurabh Gupta,
Sir my mom has house rent income and she earned LTCG from mutual fund of 98k(LTCG upto 1lakh is Exempted so i need to mention this on ITR Or not) in a financial year then which itr form to file?
You need to file ITR-2. Declare Rental Income under Schedule HP and you need to mention Long Term Capital Gains although it is 98K under Schedule 112A.
Hi Ankur,
Which ITR to use for Salary Income, House Property Income, Other Sources viz Interest n Dividend Income, Inter day Loss on Shares, Intra day Profit and F&O Losses.
You need to file ITR-3.
I am salaried. My salary is around 4L, for which the income tax has already paid through department. I did trading equity. As a new trader i did intraday for few times to learn how it is done. All buying and selling was done in one year, in 2020. The total profit after selling all was around 1.2L. What ITR form to be used? What else are required?
Hi Ebung,
I am salaried. My salary is around 4L, for which the income tax has already paid through department. I did trading equity. As a new trader i did intraday for few times to learn how it is done. All buying and selling was done in one year, in 2020. The total profit after selling all was around 1.2L. What ITR form to be used? What else are required?
You need to file ITR-3.
Declare Intraday details under Schedule PL.
Sir, I don’t have any source of income. I started trading from may 2021. I mostly do delivery for short term capital gain with few intraday. My total profit minus losses is -3000. So do I need to file Itr. And if yes then which itr?
FY- 202-21
salary 6 lakh pa
STCG-4 lka
LTCL-1 lakh (loss)
Intraday profit- 6k
which ITR to file?
Hi Atul,
Salary 6 lakh pa
STCG-4 lacs
LTCL-1 lakh (loss)
Intraday profit- 6k
Which ITR to file? – You need to file ITR-3
Sir
Last Year (2020-2021)
I Lost 1.50 Lakh Rupees On My Total Investment, & In This Financial Year (2021-2022) I Got Profit Around 90 Thousand. Last Day I Received Mail From Zerodha Regarding This,
(As per this SEBI circular, we are required to ensure that your latest income details are updated on your trading account on a yearly basis.
Please update your latest income range and also upload any one of the following documents as income proof:
Bank account statement for the last 6 months
Latest salary slip
Copy of ITR acknowledgement
Copy of Form 16 in case of salary income
Networth Certificate issued by a Chartered Accountant
Demat holding statement
Upload income proof
Please upload your latest proof of income by clicking on the above button by December 24, 2021, without which the income range we have on record will be considered current)
Now I Want To Know, How I Can Save From Tax, Because Of Those Lost Year Loses? Please Reply
Hi Sir,
I have earing from Privet job CTC 2.64Lpa + variable 30K
now from stock swing treading I have earned profit 5,500/-
loss 1100/-
do I need to IT return ?
Hi Nithin Sir,
I have invested LIC One time investment of Rs. 50000/- about 5 years back, Now after expiry received Rs. 1,14,000/- that is a gain of Rs. 54000/-
Also Chitfund Dividend of Rs. 69125/-
I need submit ITR-2, Request you to suggest where in ITR-2 I should mention LIC profit and Chitfund Dividend.
Thanking you sir for Help.
Sincerely.
Ganapathi
hai sir account under loss ,which form will filled,
Hi Ramesh
Account under loss ,which form will filled,
If loss is relating to only Capital Gains, then file ITR-2
If loss is relating to FNO or both Capital Gains and FNO, then file ITR-3
I am unemployed,n dont have any source of income.have not even completed a year since i started trading.my trading capital is hardly 15000 or less, n did not earn any profit.I wish to file itr from next year.will it be ok.or if i dont file will i have to pay penalty or something?pls guide.
Thanks
Hi Pallavi,
I am unemployed,n dont have any source of income.have not even completed a year since i started trading.my trading capital is hardly 15000 or less, n did not earn any profit.I wish to file itr from next year.will it be ok.or if i dont file will i have to pay penalty or something?pls guide.
Filing of return is optional if your income is less than basic exemption limit.
Since you did not earn any profit – it is optional.
I use to file itr 4 earlier but in previous year i done some commodity trading?
Can i file itr 4 now ?
I have losses of about 10k this year,i have done quite a few intraday trades,is filing the itr 3 form mandatory?My net income is less than 2.5 lakhs
I am company director with taking an annual package of 5Lakh 90 Thousand.
I have received I do have shares through Zerodha and Gains as reported by console is
LTCG 19,190 and STCG 95,190 . I dont do intra day trading.
I have received bank interest of 2 Lakhs from my bank account
Kindly advise which ITR I have to use
Thanks
Hi Jipson,
I am company director with taking an annual package of 5Lakh 90 Thousand.
I have received I do have shares through Zerodha and Gains as reported by console is
LTCG 19,190 and STCG 95,190 . I dont do intra day trading.
I have received bank interest of 2 Lakhs from my bank account
File ITR-2.
I do intraday(some times), STCG LTCG, but overall income is less than 2.5lakhs..
Do I need to file income tax return.
I do intraday(some times), STCG LTCG, but overall income is less than 2.5lakhs..
Do I need to file income tax return.
I am a govt. employee. my income is 10 lakh p.a. i made a profit of 10000 in short term equity shares. which itr form should i fill?
Hi Ayaan,
I am a govt. employee. my income is 10 lakh p.a. i made a profit of 10000 in short term equity shares. which itr form should i fill?
You need to fill ITR-2.
Hi Sir,
I am 22yrs old, I live abroad with my parents but dont work, I do investments and traders in stock market, I have no idea is to how should i file my ITR and which forms i need fill etc. I dont have any source of income except small amount from stocks and mutual funds, and some capital from my parents for trading and investing.
Can you please help me with this matter
Hi Shaun Fernandes,
I am 22yrs old, I live abroad with my parents but dont work, I do investments and traders in stock market, I have no idea is to how should i file my ITR and which forms i need fill etc. I dont have any source of income except small amount from stocks and mutual funds, and some capital from my parents for trading and investing.
Can you please help me with this matter?
If you have only Capital Gains – you need to fill ITR-2.
If you have FNO Income/Loss along with Capital Gains – you need to fill ITR-3.
Check this video out from quicko…https://www.youtube.com/watch?v=IJnymlMo4iY
How much do you have to earn to trade stocks on pay taxes?
Hi Naveen,
How much do you have to earn to trade stocks on pay taxes?
If it is Short Term Capital Gain – you have to pay 15%.
If it is Long Term Capital Gain – you have to pay 10% for gains exceeding Rs 1Lacs.
If it is FNO Income – you have to pay tax as per your slab tax rates.
CLARIFICATION REQUIRED ON F & O : WHICH TURNOVER I HAVE TO SHOW IN ITR, WHETHER TO CALCULATED AS PER IT CALCULATION ( CONSIDERING NEGATIVES & POSITIVES ) OR ACTUAL SELL VALUE OF F & O, THIS INFORMATION IS NOT AVAILABLE IN ANY F & O DATA
Sir, is any chance to look this module in hindi?
my total income from option trading about 400000/-and have no other source of income. So my question is
1. Which ITR form should be used
2. Do I need an audit
3. If i don’t make the audit then what is tax liability
Hii sir,
If I consider my stock investments as a business income then my mutual fund capital gain in same FY considered as capital gain or as a business income ?
Consider I have a loss of 80K in STCG and Salaried income of 5.8L, Can this loss be used to reduce my IT on a whole?
will my net income will become 5.8 – 0.8 = 5L? so no tax?
Hello Nithin, thanks for the clear explanation on topics.
I am holding a share for more than 2 years. It’s price has run up recently at around rs. 320. I want to sell its call option at strike price of rs. 380 and receive premium income. Suppose, at expiry, share price reaches rs. 380 and I have to deliver the shares. Will the profit on sale of these shares be considered as long term capital gains or business income?
Sir, I am a Government employee having salaey Imcome for FY-2020-21 was 2100000/pa and TDS deducted. F&O loss 2,27000 with turnover 480000 and non speculative short term gain of 209000 with turnover of 5200000. I can’t do trading as government employee. But what to do now and which ITR to be files. I
Hi Sir,
My salaried income is 1.5lkh pa..and in last financial year i have made 15k profits from investing..do I need to file itr?if so then which itr form?
hello Nitin ji
My query is
if my turnover is less than 5 crores and I am showing f & o profit less than 6 % in ITR3, Do audit require?
In ITR 4 under presumptive scheme,can I show 6 % profit even if it is more than 6 %?
Hello nitin sir,
I am residing in dubai, i do trading in zerodha. My salary is around 9 lakhs per annum. I have a loss of around 35 lakh in fno and commodities. Which itr to be filled by me to carry forward my losses.
I’m student .. all the investments of mine are in feature and options so can u please tell me what should i do if my profit is above 2.5L perannum
Hi my Salary income is 6.5Lkhs
Options trading loss 94770 +13220 charges
Turnover 19.59 lakhs
Which itr to be filled?
If I want to carry forward losses do I need to get audited
Sir please guide me in filling itr
I am a salaried person (8.5lakh pa). Recently I started investing on share market (1.5 lakh invested so far) and sell some share for about 4 thousand profit. Still can i filled itr1 in income tax return filing or not
Good Evening Sir,
I have the following details for FY 2021-22:
Income from Bank FD
Income from Dividend
Intraday Income Of Rs.3045.00
Short term profit of Rs.9087.00
Previous year Short term loss of Rs.165000.00
Previous year Long term loss of Rs.16000.00
My net Income for FY 2021-22 is 53000.00
Please advise me
1) Which ITR should I fill in
2) Is it necessary to make good ST Profit of Rs.9087 with PY ST Loss of Rs.165000.00
or carry forward the entire PY ST loss of Rs.165000/- as my income is less than taxable income.
Thanking you in anticipation.
Hi Rupa Bhattacharyya,
I have the following details for FY 2021-22:
Income from Bank FD
Income from Dividend
Intraday Income of Rs.3045.00
Short term profit of Rs.9087.00
Previous year Short term loss of Rs.165000.00
Previous year Long term loss of Rs.16000.00
My net Income for FY 2021-22 is 53000.00
Please advise me
1) Which ITR should I fill in – you need to fill ITR-3.
2) Is it necessary to make good ST Profit of Rs.9087 with PY ST Loss of Rs.165000.00 or carry forward the entire PY ST loss of Rs.165000/- as my income is less than taxable income – you need to set off ST Loss with ST Profit.
Hello Everyone ,
I am a bit confused and need suggestions on below queries :
a> salaried individual with income from dividend , Interests from RD/FD , STCG and intraday.
b> STCG around 9k (realized P/L excluding charges/debits-credits)
c> Intraday only time in a year with profit around 600 – 1000 only
From reading zerodha varsity docs , it seems I should file ITR 3 but confused on intraday part as profit is around 1000 only , it is going to be form 3 or not if not then which ITR form ?
d> I thought to fill up ITR form 3 since I opted for new tax regime last year but wants to continue with old tax regime from this year , it seems to be compulsory to fill up form 10IE but there’s a limit to choosing either of the tax regime only once if you are having business income . Now , in case in future , if there’s no Business income of any kind majorly from intraday STCG LTCG so I am assuming we can switch to any regime since it will be ITR1 or ITR2 (if STCG or LTCG).
Concluding my query all in all – which form I have to fill , will there be audit required (based on what I read – it’s a no ) but more light on this would be appreciated.
In Form 10IE – what will be nature of business profession
In ITR form 3 – what will be nature of business profession
Thank you in advance .
Hi Anony1122,
Concluding my query all in all – which form I have to fill, will there be audit required (based on what I read – it’s a no ) but more light on this would be appreciated.
In Form 10IE – what will be nature of business profession – Select Other Services
In ITR form 3 – what will be nature of business profession – Select 13010-Investment Activities
Sir,
I have the following details for FY 2021-22:
Income from Bank FD Rs.58418.00
Income from Dividend Rs.650.00
Intraday Income Of Rs.3045.00 (Turnover Rs.3045)
Short term profit of Rs.9087.00
F&O Loss Rs.82108.00 (Turnover Rs.168262.00)
Previous year Short term loss Rs.165000.00
Under Section 80C PPF Deposit of Rs.41000.00
Please advise me
1. As F&O Loss Rs.82108.00 (Turnover Rs.168262.00), should it be presumptive @6% of Rs.168262.00
Or can I show Turnover of Rs.168262.00 and zero profit in itr 3 to skip the hazard.
2. is deduction claim Under Section 80C is applicable to my case
Thanking you
Regards
Sir,
I have the following details for FY 2021-22:
Income from Bank FD Rs.58418.00
Income from Dividend Rs.650.00
Intraday Income Of Rs.3045.00 (Turnover Rs.3045)
Short term profit of Rs.9087.00
F&O Loss Rs.82108.00 (Turnover Rs.168262.00)
Previous year Short term loss Rs.165000.00
Under Section 80C PPF Deposit of Rs.41000.00
My income is below basic examption limit.
Please advise me
1. As F&O Loss Rs.82108.00 (Turnover Rs.168262.00), should it be presumptive @6% of Rs.168262.00 in no account cases in schedule P & L.
2. Can I show Turnover of Rs.168262.00 and zero profit in itr 3 to skip the hazard in no account cases in schedule P & L.
3. How can I carry forward the f&o loss without Books & avoiding audit.
4. is deduction claim Under Section 80C is applicable to my case
Thanking you
Regards
if i have only income from share short term capital gain around 4 lacs.
Turnover sale amount is about 30 Lakhs.
which itr to be used to avoid tax, to show as share trading business.
Or to bifurcate as capital gain?
I’m a govt employee and my salary is more than 6 lakh and I have some short term capital gain.
Which ITR form should I fill up?
i have salaried income and i invest in equity shares and do fno trading so which income tax form i should fill.
Actually I read most of your comments and than decided to file itr 3 as I was
1. A PSB employee
2.Futures and options profit – Rs. 30,710
3.Commodity market profit – Rs. 52,700
So total profit from share market was – 83,410
Later I came to know about quicko site,it automatically fetched all data from zerodha but it was automatically directing to fill itr 1 with no mention of my share market income in that.
I am investment equity shares and intraday trading start in may month 2023 can i fill up itr- 3 assignment yr 22_23.
I m a govt employee my annual salary is apprx 8 lacs & I m investing in stock market few times it intraday & few time it’s STCG.
Which form I need to fill for ITR AY 2022-23
Hello there,
I do not havw any salary income .
Also I have no other income.
I only deal in intraday, btst and short term that too sometimes.
So my realised profit is 1600 rs. And unrealised is 4100. For the period 23rd july 2021 TO 22nd july 2022. Which ITR should I file.
No doubt the income is less than taxable income slab i.e less than 5 lac, but last year my friend filed ITR 2 so which ITR should I file this year. And do i have to attach tax p&l and p&l statement by zerodha?
Hi Nithin,
I have couple of questions
q1. Realised P&L vs Net realised P&L what are we required to pay tax on?
q2. Is there a way to get long term capital gain report from zerodha or we need to manually segregate short and long term capital gains from the overall p&l report
Mine salary is 4.5/-PA
F&o 51k loss turnover 22lacs
Intraday 1k loss
Which itr I have to fill? and do I need an audit?
As what income do we file muthoot NCD interest in ITR?
Respected sir,
Recently I have filed itr3 with some tax liability. But I have choose pay later and submitted the forms and e verified also. How can I pay the tax online now?
Please suggest
Thanking you
Palash Sarkar
I am a govt employee with gross salary 5.1 LPA.. not coming under tax stab with no TDS. I do intraday and invest in delivery and mutual funds. I also have some long terms gains less 1lacs. Which form should I submit?
Sir I am government employee with gross income 700000 and doing trading incurred loss 670000 in F&O and profit 25000 in equity my question is do I need to audit form CA and which ITR from I have to file sir My demat account is in Zerodha
Sir I am government employee with gross income 700000 and doing trading incurred loss 670000 in F&O and profit 25000 in equity my question is do I need to audit form CA and which ITR from I have to file sir My demat account is in Zerodha
If this is the first year of FNO – then no Tax Audit is applicable.
Mera ek shop hai aur mai equity share me investment kiya hu kya mujhe ITR file karna chahiye to kaun sa itr aur meri income 2.5. Lac se kam hai
I have bank f.d interest income,intraday profit/loss,
STCG,LTCG.Is a senior citizen.If the total income is
less than rupees 3 lakh,which itr form to fill.If income
reaches more than rupees 3 lakh then which itr form
to submit.Best regards.
Hi , I am salaried and annual income of above 11L and I do investment as well trading and I have seen only loss of around 6 lakhs.
I have already file income tax only for my salary in ITR1 slab… Now I am worried if I need to file tax return for trading. If so can I agin file it in ITR 3 , or is it fine to leave as I had only loss.
Please help
Dear Sir,
I am doing Intraday and my income is less than 250k i haven’t made any profit till now.
My Intraday turnover is 25.56k and loss is 8.83k. Is there any problem if don’t file Income tax
Thanks for the good info.
All the best
Regards
i am a investor but accidentally i make profit for rs 10 on trading. now can i filed income tax return in itr 2
Hi I am a selfemployer and want to know which form should I fill cause my pa saving is 2.5lks
Hi I want to file Income Tax return for Last year. How to file it?
Hi Hari,
I want to file Income Tax return for Last year. How to file it? – Now, you can file only updated return as per Section 139(8A). You need to fill offline and upload it. Utility can be downloaded here. https://www.incometax.gov.in/iec/foportal/downloads/income-tax-returns
Hi,
I downloaded offline utility. Not able the find the option 139(8A).
Hi Hari,
I downloaded offline utility. Not able the find the option 139(8A)? – I assume you have downloaded Common Utility(1 to 4). You need to download specific excel based utility. As of now, it is available only in Excel version utility.
Hi Sir,
1. If I only have business income and my profits are more than 6% of the turnover, can I use ITR4 then?
2. What exactly does the Section 44AE say in respect to the stock market since didn’t find it?
Hi Kinjol Basu,
1. If I only have business income and my profits are more than 6% of the turnover, can I use ITR4 then? – Yes, you can use still ITR-4 if you want to declare more than 6% of the turnover.
2. What exactly does the Section 44AE say in respect to the stock market since didn’t find it? – Section 44AE is not related to stock market. It is applicable for business of plying, hiring or leasing goods carriages having not more than ten goods carriage vehicles.
Sir,
myself working in PSU, apart from salary drawn(approx 18lakhs) i have a net loss of 1.3lakhs under options catergory. kindly suggest the
1. itr form and audit requirements.
2. what needs to done to get rid of audit.
Hi Avinash,
myself working in PSU, apart from salary drawn(approx. 18lakhs) i have a net loss of 1.3lakhs under options category. kindly suggest the
AA] itr form and audit requirements – You need to use ITR-3 Form; we need to know the turnover to check the audit applicability. If turnover is less than 10 Crore – then audit is not applicable (I assume you have traded in FNO for first time)
BB] what needs to done to get rid of audit – You can declare 6% profit on the turnover and avoid audit.
If we sold some equity shares before 1 year and pay 15% STCG tax on it, do we have to again pay income tax on the remaining money on which we already paid 15% tax?
Hi Pranjal,
If we sold some equity shares before 1 year and pay 15% STCG tax on it, do we have to again pay income tax on the remaining money on which we already paid 15% tax?
No, only one time. In other words – 15% STCG Tax is only Income Tax.
Hi ,
I have not declared Capital Gains for last year. Heard income tax is sending notices. Is there an option to declare now?
Hi ,
I have not declared Capital Gains for last year. Heard income tax is sending notices. Is there an option to declare now?
Hi ,
I have not declared Capital Gains for last year. Heard income tax is sending notices. Is there an option to declare now? – You can file the update return for last 2 years i.e FY 2020-21 and FY 2021-22.
My only income is trading. Turnover 45 lakh in F&O, gross profit 3.85 lakh, net profit after charges is 2.55 lakh. Is audit required? In case audit required, what happens if I dont get it audited. ITR 3 or ITR 4 to be used? How to show 6% as turnover profit in order to not get audited as mentioned above.
Hi Djay,
My only income is trading. Turnover 45 lakh in F&O, gross profit 3.85 lakh, net profit after charges is 2.55 lakh.
AA] Is audit required? = Turnover is not required since turnover is less than 10 Crore( I assume this is the first time you are having FNO Income and not opted for presumptive for previous years).
BB] In case audit required, what happens if I dont get it audited = Penalty for Non-Compliance w.r.t. Audit shall 0.5% of turnover or Rs 1.5 Lacs; whichever is less.
CC] ITR 3 or ITR 4 to be used? = You can use either ITR3/ITR-4; suggest you to use ITR4 since you have FNO Income.
DD] How to show 6% as turnover profit in order to not get audited as mentioned above? = Under Schedule BP; Item # E1(a) – Enter the amount of Rs 45 Lacs and further under Item # E2(b) 6% of E1a or the amount claimed to have been earned, whichever is higher – Enter 6% of 45 Lacs i.e 2.7 Lacs.
Refer this – https://incometaxindia.gov.in/forms/income-tax%20rules/2023/itr4_english.pdf
hi
can you explain how the income tax is calculated on the sale of shares like say I have 10000 shares of a company purchased in batches like 500 + 1000 +200 + 1000 etc
also sold in batches like -1000 , -500 etc (with a combination of both buy and sell in between them)
how do i calculate the profit / loss based on First in- First out principal of income tax, any excel file in this regard will be great
Hi Somesh,
can you explain how the income tax is calculated on the sale of shares like say I have 10000 shares of a company purchased in batches like 500 + 1000 +200 + 1000 etc
also sold in batches like -1000 , -500 etc (with a combination of both buy and sell in between them)
how do i calculate the profit / loss based on First in- First out principal of income tax, any excel file in this regard will be great?
It will be calculated based on FIFO method – First in First out method.
Hi,
I had incurred losses in fno and capital losses. But I declared only capital losses. What is there remedy? What is updated return?
Hi Hari,
I had incurred losses in fno and capital losses. But I declared only capital losses. What is there remedy? What is updated return?
Suggest you to file Rectification return. An updated return can be filed if there is a reduction of carried forward loss.
Hi Hari,
I had incurred losses in fno and capital losses. But I declared only capital losses. What is there remedy? What is updated return?
Suggest you to file Rectification return. An updated return cannot be filed if there is a reduction of carried forward loss. (typo error in earlier reply)
Hi,
I am getting only the following options: modified return; after condonation and updated return.
HI Hari,
I am getting only the following options: modified return; after condonation and updated return.??
After logging in, Click services and Select Rectification in the drop down. Thanks
PLEASE TELL ME CATAGORY FOR ITR-3 BETWEEN SPECULATIVE INCOME OR NORMAL INCOME
1- MIS CASH EQUITY TRADE INCOME———————–
2-SHORT TERM TRADE INCOME————————–
3- LONG TERM TRADE INCOME————————–
4- OPTION TRADING LOSS INCOME——————-
Hi Sharmila Joun,
Please find the category FOR ITR-3 BETWEEN SPECULATIVE INCOME OR NORMAL INCOME:
1- MIS CASH EQUITY TRADE INCOME———————– Speculative Income; taxed as per slabs
2-SHORT TERM TRADE INCOME————————– Capital Gains; taxed @ 15%
3- LONG TERM TRADE INCOME————————– Capital Gains; taxed @ 10% (upto 1 Lacs – it is exempt)
4- OPTION TRADING LOSS INCOME——————- Normal Income; taxed as per slabs
Hi,
Please guide me on which ITR form I should choose.
Freelancing but on a monthly basis income – 8-9 lakh/year
Trading – losses of 22000
capital gains – Nothing as of now
Thank you
Hi Rabi,
Please guide me on which ITR form I should choose.
Freelancing but on a monthly basis income – 8-9 lakh/year
Trading – losses of 22000
capital gains – Nothing as of now
Please use ITR-3.
Hi Nitin
I have no income from other source except share sell (delivery/intraday(very rare),bank interest,MF sell (Equity& Debt),dividend interest from Soverine gold ,Nation Highway (NHAI) Bond,
please please advice which ITR form to be filled.This really helps me.
Thanks and Best Regards
Hi Shiv Prasad Chatterjee,
I have no income from other source except share sell (delivery/intraday(very rare),bank interest,MF sell (Equity& Debt),dividend interest from Soverine gold ,Nation Highway (NHAI) Bond,
please please advice which ITR form to be filled.
Pls file ITR -3; Pls declare Intraday details in Schedule PL, Capital Gains in Schedule CG and Interest Income under Schedule OS.
Hi,
I am salaried working. I have received perks in the form of ESOP. Should I need to use ITR1/ITR2?
HI Namratha,
I am salaried working. I have received perks in the form of ESOP. Should I need to use ITR1/ITR2?
Please file ITR-2;
1. I have a previous year Short term loss of Rs.165000/- which was carried forward.
2. This year ( AY 2023-24) I have short term profit of Rs.20000/-, speculative Income of Rs.3600/- and Interest income from Bank Fixed Deposit of Rs.122000. Therefore for the FY 2022-23 I have a
total income of Rs.145600/- which is below the taxable income.
Query:
a) is it mandatory to set off ST profit of Rs.20000/- from 165000/-?
b) As my current year (FY2022-23) income is below the taxable income can I carry forward the entire amount of Rs.165000 without setting off.
Your valuable advice please 🙏
Hi Rupa Bhattacharyya,
1. I have a previous year Short term loss of Rs.165000/- which was carried forward.
2. This year ( AY 2023-24) I have short term profit of Rs.20000/-, speculative Income of Rs.3600/- and Interest income from Bank Fixed Deposit of Rs.122000. Therefore for the FY 2022-23 I have a total income of Rs.145600/- which is below the taxable income.
Query:
a) is it mandatory to set off ST profit of Rs.20000/- from 165000/-? – Yes, as per the provisions it is mandatory to set off the losses irrespective of the income limit.
b) As my current year (FY2022-23) income is below the taxable income can I carry forward the entire amount of Rs.165000 without setting off – It can’t be done.
Nitin Sir, I am a private Employee, I do Intraday (Speculative & Non Speculative Trading), Long term & Short Term trade.
I have loses in Short term & Speculative & Non Speculative trades. I made profits in long term trades.
Please suggest what income tax form should i submit.
How carry losses in trades? Whether audit is required? For how many years i can carry forward losses?
Hi GS Babu,
I am a private Employee, I do Intraday (Speculative & Non Speculative Trading), Long term & Short Term trade.
I have loses in Short term & Speculative & Non Speculative trades. I made profits in long term trades.
Please suggest what income tax form should i submit – You need to file ITR-3.
How carry losses in trades? – If you file the return before the due date – you can carry forward the losses.
Whether audit is required? – that depends upon the turnover
For how many years i can carry forward losses? – you can carry forward loss upto 8 years incase of FNO Loss and upto 4 years incase of speculative loss
Hi Sir,
Recently My LIC policy maturity amount received, and I need to fill ITR2 based on my income.
Could you please let me know where this LIC maturity profit amount must be mentioned in ITR 2.
Thanks in advance
Ganapathi
Hi Ganapathi,
Recently My LIC policy maturity amount received, and I need to fill ITR2 based on my income.
Could you please let me know where this LIC maturity profit amount must be mentioned in ITR 2.
If no TDS is deducted; then please declare under Schedule EI(Exempt Income)
Hi,
I am trading in FNO. I have incurred losses. Don’t want to carry forward losses.
Is it mandatory to file Income Tax Return?
Hi Manish,
Hi,
I am trading in FNO. I have incurred losses. Don’t want to carry forward losses.
Is it mandatory to file Income Tax Return? – If the total Income is less than the basic exemption limit before Chapter VI-A deductions and Capital Gain deductions, then it is optional to file the Income Tax Return.
However, if the business turnover exceeds 60 Lacs and your overall income is less than basic exemption limit; you are required to file the return.
hi, I created a Zerodha account in April 2021 and have been doing my trading since but I have never withdrawn the amount out of the account to date. Also currently I am facing losses of 8 lakhs including total P&L from the start of the account, so my question is do I need to apply for tax returns? if so can I apply for past 2 years?
Under Schedule CG of ITR-3, I have STCG loss of -1,60,000 for positional trading (within Equity share on which STT is paid under section 111A). Since the profit is negative, I am not able to input quarterly negative values under the section F (Information about accrual/receipt of capital gain). The ITR-3 filing would show an error during the verification at the end and would not allow to file the ITR return. How to do.
My salary is 6.5L p.a and I made a short term profit of 12k and long term profit of 25k. Which itr should I have to apply.
Sir, I have no other income source and I have a loss of 17 lacs in F&O in current FY 2023-24. Which form of ITR used for tax. How can I carry forward my loss amount in next year
Hi Sir,
Salary 4.5 LPA
Intraday profit – 663.5
Short term profit – 71.11k
Short term turnover – 9L
Long term profit – 125.3
Intraday turnover – 663.5
Which Itr should I file?
i have done intra day trading from january 2023 till date.during intial days i have made losses.As on day my losses are more than my profits.my question is when i use itr3 should i deduct my total loss ( gross loss) from turnover and also deduct all expenses relating to trading to arrive at my actual income.
If this is true my total income from intraday trading is a loss of 2.5 lakhs.Then what will be my tax liability due to this trade. please clarify.
HI Prasad,
i have done intra day trading from january 2023 till date. During intial days i have made losses. As on day my losses are more than my profits. My question is when i use itr3 should i deduct my total loss ( gross loss) from turnover and also deduct all expenses relating to trading to arrive at my actual income – Deduct all purchase cost and expenses from sale value. Turnover is for the purpose of determining audit applicability.
If this is true my total income from intraday trading is a loss of 2.5 lakhs. Then what will be my tax liability due to this trade. please clarify – if there is loss, there is will be no tax liability for Intraday activities.
Hi, I have not filed Income Tax for FY 22-23, Can I file the returns now? if so what form I should choose?
HI
Hi, I have not filed Income Tax for FY 22-23, Can I file the returns now? if so what form I should choose?
Yes, you can file Updated Return[Section 139/(8A)] now. ITR Form depends upon the Sources of Income you have.
Sir ..iam a free lance Tourist guide on average earn 1.5lac year , and do stock delivery less than 10 days also trading of index future …so which itr form I fill
Hi Ibrahim malek,
Sir ..iam a free lance Tourist guide on average earn 1.5lac year , and do stock delivery less than 10 days also trading of index future …so which itr form I fill?? You need to fill ITR-3 since you have traded in index future.
Hi San,
Thank you very much for your prompt response.
I have FNO loss, ST loss, LT gain along with FD interest and Salary, can I knock of my FNO & ST loss with my other incomes? Which form is applicable to me?
Hi Puneeth
I have FNO loss, ST loss, LT gain along with FD interest and Salary, can I knock of my FNO & ST loss with my other incomes? Which form is applicable to me?
ITR-3 is applicable. You can set off current year FNO Loss with all incomes except Salary.