Zerodha – your tax aide while you trade

May 18, 2015

Check out our detailed module on taxation while trading/investing on varsity.

Note: This article might contain information that will not comply with the current tax laws. Please read the Taxation module on Varsity for updated information


Taxation is an often neglected aspect especially more for people who trade/invest on the capital markets. With the income tax department getting access to your trading data from the exchanges and with automated computerized notices that are being sent out, it becomes imperative that you are compliant, file your returns on time, and correctly.

Over half a million notices under section 139 (9) were sent out by the Income Tax Department last year, and the number is only set to increase. Filing your returns and declaring your income becomes so much more important when you are trading. To make your job easier, efficient, and correct, we at Zerodha have introduced unique reports and initiatives over the last 1 year. This post will give you a brief on each of them, and how we aide you with your taxation burden while you trade.

All your taxation queries answered

Firstly, it is important that you understand exactly how taxation works while trading in India. Did you know that all F&O trading should be declared as a business income using ITR4, any loss incurred while trading F&O (including expenses) can be put to use by carrying forward for 8 years and set off against any other business gain of yours? An audit from a CA is mandatory if your turnover is over 1 crore or if your profit is less than 8% of your turnover. This and a lot more explained  in colloquial language with over 1500 Q&A in the following blog posts.

Tax P&L statements on Q

Tax compliant, ready to use P&L statements for various exchanges and segments are available on Q with separate reports for speculative (intraday trading) and capital gains (short term/long term investing).


Tax P&L statement

Turnover Statements

When using ITR4 to file your returns (which you have to if you trade actively or if you are trading on F&O), an audit is required either if your turnover is over Rs 1 crore or if your profit is less than 8% of your turnover.  Turnover, unlike what you might be thinking, is not contract turnover but gross sum of settlement profits or losses either scripwise or tradewise. You could use either of the methods to calculate turnover, tradewise is probably a more compliant way as per this guidance note on Section 44AD (Section 5.12, Page 23). Remember that any query that you may have on this is already answered here.

Not getting an audit done is one of the reasons many people have received notices under section 139 (9). Check this post to know more.


Links to Scripwise and Tradewise turnover statements on Tax P&L

This is how your tradewise turnover will look after you download (scripwise turnover is made available along with the Tax P&L). As you can see, turnover is not contract turnover but absolute sum of all profits and losses. Also as per the guidance note, the conservative approach will be to consider the sell value (in case of options) also into turnover. Remember again, the only reason of looking at a turnover statement is to determine if you need an audit or not. If you are trading actively, my advise would be to get an audit done in any case.


Downloaded Tradewise turnover report

Day Counter for short/long term holdings

You must be aware that as an investor in India any stock held for more than 1 year or 365 days from when you bought is exempt from any tax on the gain (also called long term capital gain), and short term capital gains (STCG) made by selling stocks held between 1 day to 365 days are taxed at 15% on the gain.

If you have bought the same stock multiple times, the IT department says that what is bought first has to be delivered first (FIFO or First in First out), if you sell to determine if it was LTCG or STCG. Now it is quite tough to keep track manually of how many days since you have bought a stock, and you could very easily end up paying 15% of the gain as taxes by selling a few days before 365 days since buying.

A few months back, we had this client who sold  ITC with a profit of Rs 20 lakhs, 360 days from when he had bought. If he had just held on and sold it after 5 days, he would have saved paying STCG of 15% or saved a whopping Rs 3 lakhs. This incident gave us the idea to build this feature onto the holdings report. 

Now, you don’t need to worry of manually keeping a count of how many days have elapsed since you bought any of your stocks. We have given you a day counter on the holdings page of Q. We have even brought in the feature to show days (and date) since buying separately, if you have bought the same stock multiple times.


Holdings on Q

  1. Day counter
  2. A green arrow signifying holdings more than 365 days, selling which won’t attract any taxes.
  3. If you have bought the same holdings in multiple trades, the split up showing the same.

Tax Loss Harvesting

A report which will help you plan IT returns efficiently when trading equity delivery based is also available on Q. It is the act of booking any notional loss to reduce tax impact on any short term gain that you might have had in the year. We have given you a report of any tax loss harvesting opportunity in your account on Q. Read all about tax loss harvesting here.

Open Option Position

*added on 8th June 2015

An additional report that we have included in the excel download of the Tax P&L is an easy way to calculate the value of your open options positions as on start and end of the financial year.

Check the example below:


Open option positions on Tax P&L

The starting ledger balance on April 1st 2014 for this client is around Rs 6.94 lks. But he had open option positions as on closing 31st March 2014, long option premium of Rs 13272 and short option premium of Rs 2430. To get the actual ledger balance you need to add the long option premium and debit the short option premium as on close of 31st March 2014. This is already done on the report to show the actual starting ledger balance for this client which is Rs 7.05lks. Similarly, the closing ledger balance is also calculated based on the value of the open option positions as on close of of 31st March 2015.

This report is extremely useful to tally your ledger with the P&L statement while filing your returns.

All the above reports/initiatives should make your life easier around the taxation season, and help you stay compliant.


Happy Trading,

Founder & CEO @ Zerodha

Post a comment

  1. Ajay Kumar Kar says:

    In preparing ITR 2 for my STCG & LTCG from the downloaded Traded Tax PNL for all Segments(Zerodha), I find that although that downloaded Excel shows Realised Profit of over Rs. 2 lakhs, on sale of Equity but the ITR shows Loss on STCG. How it can happen not clear. Anybody, please answer the possibilities for such situations.

  2. Sharad says:

    Sir, I earned almost 6.5 lakhs in f&o trades from 1stApril 2019 to 31st march 2020.
    1. Should I transfer this amount to my bank account from my demat account?
    2. Is P&l statement From Console is enough to submit in income tax return for 2019-20?
    Please clarify sir..

  3. Neil says:

    Question 1 ) I am government employee I had some investment in share market with zerodha my tax deduction will automatically done at department on salary but I had not filed itr myself yet
    Now I want to file my itr
    So which itr I have to file itr 1 , 2 or 3

    question 2 )I am government employee & in share market I do intraday, f&o for 3 to 6 month and get delivery of share for long term which itr I have to file itr 1 , 2 , or 3

  4. Sai Sandeep says:


    I had a query,One of our client invest in shares & Securities through portfolio management company and every year end they will issue audited balance sheet of portfolio,

    My Question is While we are treating income from Capital gains can we claim all the expenses mentioned in balance sheet by portfolio company…These are the some expenses given in balance sheet,Setup fee,Audit fee,Management fee,STT, Fund Accounting charges etc.

  5. Neelima says:

    This page needs to be updated as per the latest ITR norms.

  6. shivam mishra says:

    how to check my capital gain report guide me ASAP

  7. harshit vora says:

    Hi Respected Nitin,
    I had a query on the report generated for tax purpose,
    most of CA firm require the trade data in below format
    Stock Symbol,Qty,Sale Date,Sale Rate,Sale Value,Sale Expenses,Purchase Date,Purchase Rate,Purchase Value,Purchase Expenses,Purchase Index Cost,Profit/Loss(-), Short Term Capital Gain (STT paid).
    Some how i request your team to help with same,but to my surprise the answer was use the existing one.
    can you help?

    • Matti says:

      Hey Harshit, this is something we’re working on for the new backoffice, however, I’m afraid providing a custom report at this point wouldn’t be possible.

  8. hemanth says:

    1)my trade wise turnover showing 9 lakhs but my scripwise turnover showing 1 crore 20 lakhs do i need tax audit or not…?? for fy 2016-17

  9. shailesh says:

    I had some stocks which were in the loss and I sold them in April-2018, had bought before March 2017. When I checked for tax PL, it doesn’t show them in 2018-19 report. Why is it so?

  10. Nitin says:

    Sir it is mandatory to file ITR also when your income is less than 2.5 lakhs or you are having loss in trading?
    Please reply

  11. rav says:

    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 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 ot 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 21018-19.
    As i am likely to trade in coming fy ie 2018-19, i need to carry forward my earlier losses.
    Kindly guide.

  12. Saurabh Kushwaha says:

    Suppose Tax P/L statement is

    Is STCG is (10000+20000) – 5000 (charges) = 25000 or STCG that needs to be mentioned is 30000

  13. gvyuvaraj says:

    The Absolute P&L takes the average of all Buy and All Sell and shows negative. But Actually I booked profit. Q Backoffice doesnt show the Bonus stocks, which I received and sold. Shows buy and sell qty as same ( not showing bonus qty)

    Can some one clarify on this.

  14. gvyuvaraj says:

    The Absolute P&L Shows takes the average of all Buy and All Sell and shows negative. But Actually I booked profit. Q Backoffice doesnt show the Bonus stocks, which I received and sold. Shows buy and sell qty as same ( not showing bonus qty)

    Can some one clarify on this.

  15. Neha Aggarwal says:

    Hi Team,

    I am not able to check Day counters against my holdings in Q. I need this to save STCG. The rows are blank for all my holdings. Please help.

  16. Rashmi says:


    Can you please let me know the process to get access to Zerodha – Q.


  17. PR says:

    Hello Nithin & all,

    While Q -> Tax P&L does provide a breakup of Long Term, Short Term Gross Profit and Intraday Gross Profits, the costs (brokerage, turnover charges, STT, service tax, stamp duty and SEBI charges) for these are shown in a combined manner.

    While performing a tax calculation, I believe we need to
    1) consider the total profit or loss including all charges (possibly only the STT might need to be excluded as an expense for STCG but all other charges are relevent, is that right?)
    2) intraday and short term transactions are considered separately (the former is considered as speculative business).
    3) Is STT to be considered as expense for Intraday (speculative) transactions as well? Are all other charges to be considered an expense?

    Would it be possible to provide the cost breakup (for each of the costs, i.e. brokerage, turnover charges, STT, service tax, stamp duty and SEBI charges) individually for the short-term vs intraday vs long-term trades?

    Alternatively, can you kindly provide a tradebook report that includes row-wise cost breakups for each trade, in such a case, we can do the calculations ourselves to arrive at these figures.

  18. Amit says:

    Nithin, you are doing a phenomenal job to help retails small traders and investors. Zerodha’s initiative to help small traders in filing income tax with or without audit is extremely helpful. Zerodha is already very popular in India and future seems to be very bright.

  19. Pankaj Kumar says:

    Hi Team,

    I want all expenses (DP charges, AMC Charges etc.) sheet for particular FY. From where i can get it ?

  20. S. Uma says:

    Sir, How to get tradewise turnover details now for the past years. This is very urgently required by me.

    • We are having some issues supporting this utility in our old version of Q. We will try to have it up soon. You will have to calculate this on your own until then.

  21. Balaji K says:

    Dear Sir,
    What is FIFO Policy? Is it applicable for squareoff the order in backoffice? How is it working for closing the order.?

    • Akshay.A says:

      Buy average is calculated based on FIFO or first in first out.
      Check this link

      • Balaji K says:

        Dear Sir,

        Apologize for asking the same question again. I need a litter more clarification. If i had buy a NRML order of AluminiumMay17 (Buy price Rs.126) on 1 May 2017. I hold that position. After 10 days, I had buy 2 lot of AluminiumMay17 (Buy price Rs.123) thro’ MIS. Let’s say 10th May 2017. In my Positions window, NRML order shows separately & MIS order shows Separately. It didnot calculated the average of all the 3 orders. I didnot sell any of the contract. What will happened at the end of the day (10th May 2017)?

        • Akshay.A says:

          Your 1 lot NRML position of Aluminium will be carried forward. The 2 lots of MIS Aluminium will be squared off automatically by the RMS system if it is not closed before the auto square off time at 11.05pm.

          • Balaji K says:

            Dear Sir,

            But as per FIFO policy, My NRML position of Aluminium should sold first & My MIS position of 123 (1 order) sold next & My another MIS order of 123 should convert into NRML positon. It should be happened as per FIFO. This is called FIFO na sir…Anything I buy at First, It should sell at first irrespective of NRML or MIS in Backoffice.

            • Balaji, MIS is an intraday product, all MIS orders automatically get sold before close of trading day. But this is just for trading purpose. If you look at the P&L report on Q, FIFO, the way you are asking would have been applied.

  22. marimuthu says:


    I have first time started trading in zeodha 2016, my total turnover 48000Rs.
    Penalty for not auditing account under 44AB is 0.5% of total turnover or 1.5lakhs which ever is less than.

    I have discussed with some CA they have asked around 8-12k for auditing and filing ITR4. As per penalty for not auditing in my case is Rs.244 only.

    Should i pay penalty or go with CA for auditing, Please advice me?

    My total salary is 4.5Lakh for FY2016-17.

    • I’d suggest if your turnover is so low, just show 8% of turnover as profit and pay tax on it. 8% of 48k is around 4k. If you add 4k toyour 4.5lks sal, you are in the 10% tax slab. So you pay only Rs 400 as tax.

  23. sukant arora says:

    tax p&l in reports catagory not showing my gains of fy 2016-2017,only charges like brokerage etc. are showing

  24. Aruna Agashe says:

    I did Intra-day Trading on Zerodha for about one month and had a nett loss of Rs 7670/- If I add all Profit and Loss figures it comes to Rs 11507 (I understand that this is Turnover for the purpose of Income Tax). I am proposing to file ITR-3 as follows for this Trading activity:
    Nature of Business 0204-Trading-others

    Balance Sheet
    No account case
    Sundry creditors Rs 15000/-

    No Account case
    Gross Profit -7670
    Nett Profit -7670

    Schedule BP
    1 Profit before tax as per P&L -7670
    Nett profit or loss from speculative business included in 1 -7670

    When I fill up the above
    Schedule CFL automatically got the entry
    7670 under loss from speculative business

    I hope above are the right steps to carry forward the loss and mainly to show that I did the trading activity lest I get a notice from income tax department in future.

    Please confirm or guide me further.

  25. vinayak says:

    Hi Nithin

    the Tax PnL portion of Q doesn’t seem to be working since last week, I also raised a ticket with support and they also seem to be unable to help.

    Is there a timeframe in which it will start working again?


    • Vinayak, currently we are processing P&L requests in a queue. Can you go put the request, you will be able to see P&L in afew hours. Working on making it instant soon.

      • Shashi Bansal says:



        The Tax P&L report for my acc is showing wrong details. I had an open futures position on 31Mar16. The closing rate in report of fy2015-16 and opening rate in report of FY 2016-17 do not match.

        This difference in rate is leading to wrong amount of profit.

        Please advise.



  26. Sundar says:

    It shows 502 Bad gateway whenever i search anything in P & L option.
    It used to work previously.

  27. Varughese says:


    I am trading stock futures. As per my understanding profit/loss in futures comes under business income or business loss. I also want to do intraday trading of shares(cash). I have read somewhere that day trading of shares is classified as speculative income. Can we club the profit/loss of futures trading and day trading of stocks together. Also can we set off the loss of one segment (say intraday stocks) with profit of the other (futures trading)?

    In business income there is a carry forward provision of loss for 7 years. Is that also there for speculative income?

  28. kolkatababu says:

    Hi Nitin,

    In following site seems to be sebi site:

    I found this phrase:
    “Appropriate stamps have to be affixed on the original contract note or it is mentioned that the consolidated stamp duty is paid”.

    Is it possible for client to pay consolidated stamp duty, rather then paying it for each contract?


  29. grkg says:

    Hello Nitin,

    I have a small account, i trade mostly in Futures, from this April to till date i see my turnover is about 2.5Ls as per zerodha’s trade wise turnover sheet. We still have 4 months to go for financial year, So my question is whether to approach a CA for auditing my account by end of financial year.

    Appreciate your response.

    • Venu says:

      Audit is required only if your profit isn’t more than 8% of turnover and if your total income for the year is higher than the basic exemption limit of Rs.2.5 lacs.

  30. Amit says:

    Hi Nithin

    Assume that I only trade in F&O Segment

    TOTAL TURNOVER 83,527.50
    8% of TURNOVER = 6682
    TOTAL CHARGES₹1,875.97 (STT, Brokerage, Stamp Duty etc.)
    NET Profit from Trading = 3276.53
    Other Business Expenses (Phone, Electricity etc) = 2000

    Assume the above numbers as average monthly trading activity.


    Will Audit be required in this case at the end of the year when filing ITR4?


    • Venu says:

      If you have no other source of income, then no audit is required, since your earnings are below the taxable level of Rs.2.5 lacs. If you have other sources of income, then yes, audit is required since profit is less than 8% of turnover.

  31. akash says:

    Hi, I have transferred some long term holdings from another broker to my zerodha demat account and also have holdings bought through zerodha. I want to know what documents I have to give to my ca so that my long term holdings are exempt from tax? Moreover, I have some short term holdings bought through zerodha. Which reports do I give to him from Q backoffice?

    Thanking You

  32. puneet says:

    BSE is opening an international exchange in Ghandhinagar. does that mean we will be able to invest in US stocks through that new exchange.
    will zerodha apply for membership to this new exchange?

  33. venkata says:

    I am active member of zerodha in FY 2014- 15 and 2015-16 and paid almost 1 lakh brokerage . Please Provide immediate assistance as I am struck here.

    For FY 2014-2015 , I filled IT returns though some 3rd party. They used ITR2 and Calculated turn over as Buy price+Sell price which caused Heavy turn over and I am getting Limited scrutinity notices as turn over exceeded 10 crores .There were many intraday futures I did Which is 57 times leverage. So,I was able o generate heavy turnover that way . How to overcome this problem ??

    But as you said actually turn over is calculated differently .Sum of favourable trades + unfavourable trades .

    Can you suggest to overcome this ??

    DId my Consultancy did anything wrong ? Is it calculated that way in ITR2 ?
    Is there anything like if I use ITR4,turnover is calculated differently like sum of favorable and unfavourable trades .

    I idnt fill ITR for FY 2015-16 Yet . Please suggest Ho to fill . Any CA people available in Hyderabad that you can help?

  34. puneet says:

    can we invest in US stocks , if yes how ??

  35. Venki says:

    Hi Nitin,

    I am in process of ITR 4 filing with CA audit. Please guide me on what are the reports I should provide them for this process. I have given all the bank statements, Form 16 (I am salaried person), Profit & loss statement from Q – Back office. However, They are new to F & O activity. I found Tradebook & Ledger in Q – Backoffice.
    Should I provide Tradebook & Ledger too or Profit & Loss statement is enough. Please suggest.
    Thank you. Venki

  36. Chandrashekhar says:

    What is the calculation? please give with example in ITR4.

    53 In a case where regular books of account of business or profession are not maintained, furnish the
    following information for previous year 2015-16 in respect of business or profession

    53a Gross receipts
    53b Gross profit
    53c Expenses
    53d Net profit 53d –

  37. Sagar says:

    i received notice under section 143/2 for scrutiny of the my income tax return filed for assessment year 2015-16. At that time I have not filled the ITR4. What should I do now?

  38. debanjan says:

    In case of investments in euity shares/equity mutual funds which i will not sell in next 5 years, DO I need to file ITR2. I have bought Rs. 5 lacs shares/ equity MF in February 2016 and I do not intend to sell then in near term.

    My salary is Rs. 12 LPA.

    Simply Filing ITR1 will be enough right?

  39. Sud says:

    Hello Nithin,

    I am a salaried professional with Tax slab of 30%. I have started short term trades in Share market from last 1 month(June-16). This is my fresh entry in stocks market and earlier I never did any trading/investing in share market. I buy stocks and keep it for more than 1 day and less than 1 month. Till now I have profit of Around 30K which is around 8% of overall short turn turnover.

    I have also done 1 intraday where I have loss of Rs.1250/-

    My Questions
    1) How much Tax I need to pay on this profit of 30K. Is it 15% or 30%( As per my tax bracket)
    2) Do I need to pay any advance tax (before 15sept) on this 30K if my company deducts TDS every month(Around 15K) on my monthly salary. Or I need to pay whatever is tax on this 30K profit at the end of the year(before 31st March 2017).
    3) Will I be considered as Trader and Investor by Income tax if I continue such BTST/Short term buying/selling and what % of tax I need to pay apart from my salary.
    4) Will this 1 intraday transaction matter for identifying me as Trader vs Investor.

    Thanks in Advance!

  40. Nimesh says:

    Sorry to bother you again. When we refile ITR IV after doing audit for the reply of notice under 139, then do we need to pay any penalty for not doing audit earlier that means for late audit? Please clarify. Thanks

  41. RAJINDER SETH says:

    my pension is 260000.
    salary is 240000
    FDR Intt is 50000
    my short term ternover 1150000
    short term loss 50000
    I LOST 500000 IN INTRADAY (2015-2016)
    I do not want to carry my losses next year ,
    will i need a audit

  42. Saif Ali Khan says:

    Hi Nitin,

    I am a salaried professional, my stock P n L for this year is
    Intra-day / Speculative profit -3234.95
    Intra-day / Speculative turnover 6042.55
    Short-term profit 306.00
    Short-term turnover 3063745.80

    Now, i have done Intraday that is bought in cash n carry or MIS 27 times in the entire financial year 2015 – 2016.

    I am confused if i need to use ITR 4 or not and will i need an Audit, I have not done any F n O.

    • Venu says:

      Since the profit is less than 8%, audit would be required. You can however declare 8% profits and pay taxes on it to avoid turnover.
      If the total income is below basic exemption limit, no audit is required. And yes, ITR 4 is required.

  43. Nimesh says:

    1. I have filed financial year 14-15 return (ITR IV) through CA but I have received a notice under 139.
    Following are the details:
    Salary income: 6,75,000
    FnO trading loss: 6,30,000
    equity cash loss: 47,000
    turnover less than 1 cr.
    Net : 6,75,000-6,30,000= 25,000 which is less than 2,50,000 (min tax slab)
    So in this case do I need an audit to be done & refiled?
    2. Can we show fno loss as non speculative short term loss & pay 8% on equity cash turnover to avoid audit.
    Please advice.

    • Venu says:

      You can’t set off F&O Trading loss against your salary income. F&O is considered a business activity and FO losses can only be set off against business income. You can carry forward this loss to the future years.
      Since your total income is greater then the basic exemption limit, audit is required. Yes, you can get away with the audit by paying taxes on 8% profits of turnover.

      • Nimesh says:

        Thanks for reply.
        One more query please.
        1. My equity cash turnover is around 1,11,000 & fno turnover around 15,00,000 that meas I have to pay 8% on total
        turnover, right?
        I think it will be very costly as I cant claim this loss in future so it will be better to audit. Am I right?
        2. My CA is advising me following thing:
        – to show that fno loss under short term capital gain/loss
        – & show 8% profit on speculative turnover which is 1,11,000 to avoid audit, is it possible?
        Please guide, I will be grateful. Thank u in advance

        • Venu says:

          8% of turnover is to be considered as profit and taxes paid on such profits to avoid audits. If the turnover is 15,00,000, 8% of it is 120000. You’ve to pay taxes on 1.2 lacs based on your slab rate. You can’t consider FNO losses as STCL. Make sure you’ve computed your turnover using the right methodology.

  44. Hemant says:

    In your Trade P&L as well as the Tax P&L generated for the financial year 15-16, the dates of trades i.e. buy date and sell date does not come out in the excel.

    Please let us know how the same would be generated. As that will help us in bifurcating trading in stocks as capital gains or business income.

  45. SANDY says:

    i am salaried person and some short term loss in delivery and f&O around 60k, i dont wan’t this loss cary forward for next year. can i file ITR1 form not showing this loss instead of ITR4,.

    • The issue with using ITR1 is that IT department will be very easily able to pick that you have traded the markets and not declared the income. The chances of scrutiny becomes much higher. It is best to use ITR4.

  46. Hemant says:

    Dear Nithin,

    Please let me know that trading in F&O business will be considered under normal business or speculation business. Also if i have loss in this year (FY 15-16) in futures and options and the turnover (as calculated by Zerodha tradewise) is around 4 lakhs then do i need to get the accounts audited as it is less than 8%.

    Also i had salary income in this year on which proper TDS was deducted by the employer. So please help me whether it will be normal or speculative business and the requirement of audit is there.

    Would be of great help. Thank you.

  47. puneet says:

    i already have an account with zerodha and my bank account is attached to it.
    can my brother open a new account for himself , but can he attach my bank account to it instead of his own.
    can this be done. so the new Demat & trading account will be in his name , but it will be attached to my bank account.


  48. beena says:

    I do only Stock trading. so which IT-R is Applicable for mine. Please Suggest.

    • Venu says:

      If you are an individual who is declaring trading as a business income, you have to use ITR 4. If you are an investor and trader, you can show trading under business income and investments as capital gains on the same ITR 4 form.

  49. lathief says:

    Hi Nithin,

    I trade only in F&O segment so my income is chargeable under business income.

    My return on investment is more than 8 %, so can I take advantage of Sec. 44AD and declare my income as 8 % and pay tax on it.

  50. sunil says:

    I have a suggestion on a new kind of Tax P&L report per FY, which will help the retail investors(delivery Trading) paying STCG and Advance Tax.

    Each row should have P/L, all charges per day per script using FIFO method.

    While filing returns under STCG, we can get the below values.
    Full value of consideration(A) – Sum of Column 6 – Sell_Value
    Expenditure Incurred(B) – Sum of Column 9 – Total Tax exempted charges
    Cost of Acquisition(C) – Sum of Column 5 – Buy_Value
    A-B-C should be equal to Sum of Column 11 – Taxable P/L

    Also to help on Advance Taxation split, Provide sum of Column 11 – Taxable P/L, for each of below date-range on column 8 – Sell_Date.
    1/4 – 15/9, 16/9 – 15/12, 16/12-15/3, 16/3-31/3

    This report should be sorted on per Column 1 – script name and per Column 8 – Sell date.

    I hope this info is useful.

    • sunil says:

      I just realized the column names is missing in the above message. Below are the details needed per script, per Sell Date

      1-Script Name, 2-Number of Shares, 3-Buy Date, 4-Buy Price, 5-Buy Value, 6-Sell Value, 7-Sell Price, 8-Sell Date, 9-Total Tax exempted charges (eg., Brokerage, service tax etc., But not STT), 10-Realized P&L(Actual P&L), 11-Taxable P&L(Column 10-Column 9)

  51. Chandubhai makwana says:

    Thanks for your help!!

  52. Chandubhai makwana says:

    Hello, Please find below my total turnover statement for FY 2015-16 as extracted from your website. I trade only in F&O and I do not have any other source of income.

    FUTURES GROSS PROFIT₹-2,94,578.75
    TOTAL GROSS PROFIT₹-3,47,276.25
    FUTURES TURNOVER₹10,13,383.75
    OPTIONS TURNOVER₹1,97,628.75
    TOTAL TURNOVER₹12,11,012.50
    TOTAL CHARGES₹19,071.60

    I have the below taxation queries and looking fwd for your response on the below:
    1) Can you please advise whether I have to get my accounts audited?
    2) Also, which ITR form I need to fill?
    3) Further, I guess I can c/f the above loss for upto 8 years and I can offset them against any profit I make in F&O in the coming (8) years – Please confirm that my understanding is right on the same.

    Many thanks.

    • 1. Your trading is in loss of around 3.5lks, If you have any tax to be paid through your salary or if your total business income has some tax liability, u need an audit.
      2. ITR4
      3. Yep.
      Suggest you to go through this:

      • Chandubhai makwana says:

        Thanks Nithin.

        No, I do not have any other tax liability. So, based on that, I am assuming no audit is required. Correct?


        • Yep, if no tax to be paid, there is no need of audit.

          • Hemant says:

            Dear Nithin,

            Please let me know that trading in F&O business will be considered under normal business or speculation business. Also if i have loss in this year (FY 15-16) in futures and options and the turnover is around 4 lakhs then do i need to get the accounts audited as it is less than 8%.

            Also i had salary income in this year on which proper TDS was deducted by the employer. So please help me whether it will be normal or speculative business and the requirement of audit is there.

            Would be of great help. Thank you.

  53. asap says:

    Greetings !

    Please let me know if I can claim short term capital loss that I incurred trading options.

    Would your answer be different in the following scenarios ? :

    – Shorting options first and then closing it with a Buy

    – Long options first and then closing it with a Sell

    – Shorting options first and then letting it expire on expiry date ( that is, not closed with a Buy)

    – Buying options first and then letting it expire on expiry date (that is, not closed with a Sell)

    Can I offset short term capital loss with my Salary or other income under all the four scenarios above ? I am asking this question because STT may not have been paid in all the cases.


    • Trading done on F&O is considered as a business, so any profit/loss is business gain/loss. This loss can’t be offset against salary, but only against other business gain. Suggest you to go through this:

      • asap says:

        Oh ok I am sorry. I mean set-off against future capital gains from shares, F&O and properties (whether Long term gains or short term gains).

        Please let me know if the set-off against capital gains, as above, is allowed even where STT is not paid (in the F&O transaction that entailed short term capital loss).

        Thanks once again.

  54. BSPTiger says:

    Hi Nithin,

    Just want to get your opinion also for this question:

    does it mean if I buy and sell in same day irrespective of “Order Type”(CNC/MIS) ,In Tax audit I need to only consider Profits and Losses value not the sale side value, Because I am not holding it 1 day for delivery ?

    Really appreciate your help.


  55. BSPTiger says:

    Thank you Very Much Venu and Nithin for your support, I will count my turnover based on these input.


  56. BSPTiger says:

    Thanks Nithin.

    Just one more clarification.

    1. does it mean if I buy and sell in same day irrespective of “Order Type”(Cash & Carry) ,In Tax audit I need to only consider Profits and Losses value not the sale side value, Because I am not holding it 1 day for delivery ?

    Thanks for your patience.

    Really appreciate it.

    Manish Rathore

    • Venu says:

      Yes, CNC/MIS are facilities provided by the broker. Ultimately what matters is whether it was an intraday trade/delivery trade for the sake of computing turnovers.

  57. BSPTiger says:

    Hi Nithin,

    Thanks for quick response, Really appreciate your help.

    The module say for:

    Delivery based transactions: For all delivery based transactions, where you buy stocks and hold it more than 1 day and sell them(My holding is not for 1 day).

    Speculative transactions (intraday equity trading): For all speculative transactions, aggregate or absolute sum of both positive and negative differences from trades is to be considered as a turnover. So if you buy 100 share of Reliance at 800 in the morning and sell at 820 by afternoon, you make a profit or positive difference of Rs 2000, this Rs.2000 can be considered as turnover for this trade(Here I am buying and selling or vise versa same day but I am not opting for exchange to close my position and by default this position will convert to delivery or short sell depending of nature of transaction).

    I am little confuse can you please analyze my situation as it’s seems little specific, Because I can buy and sell both by using “Normal Type”.

    Thanks again for your support.

    Manish Rathore

    • Your order type NRML, SUPER NRML, MIS or whatever doesn’t matter. Are you buying for intraday or delivery is important. If it is intraday then you need to sum all profits and losses. IF delivery, only sell side volume.

  58. BSPTiger says:

    Hi Nithin,

    Thanks for your immediate response.

    My broker gives me two choice to place order type “Normal Order” and “Super Multiple”.

    Normal Order:

    In “Normal Order” they provide little less Margin as compare to “Super Multiple”, if I buy share using “Normal Type” I can take delivery for it if not sell within day, If I sell share using “Normal Type” in early morning. settlement for this happen either from DP account or I need square of by buying same quantity,same exchange in same day (I can also sell share using “Normal Type”even If i don’t own any quantity in my DP account).

    Super Multiple:

    Super multiple is purely for Intra day purpose, exchange automatically square up position at 3.10 PM.

    Now my question is that if I sell 500 shares of SBI using “Normal Type” in early morning at 100000 and buy the 500 shares at 99000 in same day to square off position,I verify STT charge for transaction it’s .025% and contract settlement for this have statement “Transaction Settled by other than by delivery”.How can I count “Turnover” for this transaction.

    I am considering my share market activity as business income this year.

    Thanks in advance for your help.

    Manish Rathore

  59. BSPTiger says:

    Hi Nithin,

    How the turnover count for stock bought in Cash & Carry section but sold in same day, Ex I brought 100 share of SBI by choosing Cash & Carry order type but I sold it in same day, what will be the turnover for this.

    Thanks in advance,
    Manish Rathore

    • The sell side value will be turnover. But if you are buying and selling delivery, it is capital gains. In case of capital gains there is no need to worry about turnover. Check this module, everything explained in detail:

      • Manish says:

        Hi Nithin,

        Thanks for immediate response.

        In my case my broker give me order type option as “Normal Order” & “Super Multiple”.

        Normal order:
        I can buy & sell with 4 times with equity margin and if I buy share with Normal Order I can hold it for delivery and if I sell (I can sell even if I don’t have any holding of share which I sold) with normal order then it will adjusted with DP holding or I can square off it by buying back with same quantity and same exchange and same day,otherwise it will settle in auction.

        Super Multiple:

        It’s auto square product, it’s purely for intra day trading and it’s auto square off at end of day by system.

        My question is if I sell 100 share of SBI at 18500 by choosing “Normal Type” in early morning and buy SBI 100 share in same day at 18000 then what will be my turnover. My STT charge for this transaction is .025%, and in Contract note settlement happen with this statement section “Transaction Settled by other than by delivery”.How can I count turnover for this trade?

        I am showing my trading as business income from this year.I need to count turnover for Tax Audit.

        Please also let me know if I can reach you with telephone.

        Thanks in advance for helping me, your response is always spot on.

        Manish Rathore

  60. RAJINDER SETH says:


  61. Rengasamy says:

    I cant able to see my tax profit loss statement in

  62. sreejith says:

    Sir i have short capital gain in 2015_16 of rs 30000 so i need to pay advance tax 15% ?

  63. Sukesh says:

    Suppose if i’m a self employed businessman and have taxable income from my business operations.
    If for any reason i don’t have money left with me at the end of the financial year to pay taxes even if i owe to pay taxes, say all the money was spent for some emergency or is stuck up somewhere in business.

    What is the remedy for such people? should they just file income tax return and can they take time to pay taxes stating their inability to pay currently?

    • Sukesh, all taxes have to be paid before filing your IT returns. If you haven’t paid the taxes, I guess you have to just pay the penalty pay it on a later date and only after that file your returns.

  64. Kumar says:

    Hi Nithin,

    My total FO turnover for FY15-16 (both Futures and Options is 2,22,00,000, but my actual pnl is negative -1,84,980.00. Do I have to file the tax. I do lot of options writing so my Option turnover is 2,15,34,335.00. Please clarify me. Thanks.


  65. Manish Kumar says:


    Suppose I buy some shares worth 1 lakh in Jan 2016 and sell them in June 2016 for a profit of 20000 Rs, how will this affect my taxable income in FY2015-16 and FY2016-17

  66. arpit bansal says:

    i am a college student and i dont have any income.
    i recently opened a trading account with zerodha , so do i have to pay any tax.
    arpit bansal.

  67. Siddharth Jain says:

    I had 18000 loss in Intraday trading, while total turnover was about 60000, when I put it I got notice from CPC for audit and maintiaing books of accounts.

    Kindly let me know is it legal if I now show my profit as 8% (around 4800) and not get tax audit, because tax audit is prooving more costlier. And do I need to show Income statements and balance sheets in this case.


  68. Vaman Nene says:

    Request to answer the following query
    – I am having IDFC shares purchased this year and as you know, there is a demerger of IDFC and IDFC Bank. For each share of IDFC, existing shareholders of IDFC will get 1 share each of IDFC Bank when it gets listed.
    When this demerger was effective, the shares of IDFC were down to approx Rs 70 and now they are at Rs 61.2.
    If I sell by short term holdings, I will book a shot term loss.
    Can I claim this loss as Short term Capital loss considering that I would be getting IDFC Bank share somewhere in November when it gets listed?
    Will this short term loss be treated as any other short term loss while filing IT return (like I can carry forward this loss to adjust it again short term gains for next 8 years?

    Warm regards,
    Vaman Nene.

    • Vaman, you will need to reduce the cost of IDFC shares that you had purchased. Reduce it by how much, in this case it is quite simple, reduce it by half. Use the rest half as cost price for IDFC bank. If you are making losses over and above the reduced cost, then yes you can show that as short term loss.

  69. Rati says:


    I have found lot of mistakes in Tax PNL generated by Q for FY2014-2015. In my case Long Term gains are missing. Short term gains have lot of scripts missing. I have raised the tickets (Ticket #984900 and
    Ticket #812840). I request you to look into it and plzz get it fixed asap. With these kind of errors, these reports will be of no use.



  70. Ranjan says:

    Thanks Nithin,
    I guess a salaried employee can be a both trader and investor as in intra-day cash and F&O as trade and shares hold for more than 12 month as exempt LTCG..and delivery based shares transactions, which are held for less than 12 month as STCG/business income depending on the frequency. Please correct me if I am wrong.

  71. Ranjan says:

    Hi Nithin,

    I was going through the study material-markets & taxation under the varsity section and would like to thank you for sharing such an important piece of information. Although I feel I have understood the topics, I am reiterating the points below and request you to confirm if my understanding is correct? My understanding takes a perspective of a trader and an investor, both. What I understand are in points 1-4 as below, for which I request your confirmation.

    1.) LTCG for shares held more than 12 months is always exempt (where STT is paid) for every individual be it trader or investor or both.
    2.) Intraday equity in cash segment is speculative business income and would be taxed as per slab rate. We can claim business expenses against the gains.
    3.) Intraday F&O or positional is non-speculative business income and would be taxed as per slab rate We can claim business expenses against the gains.
    4.) It’s the shares held less than 12 months where there is a bit of subjectivity involved as in it can be either treated as STCG or be treated as non-speculative business income depending on whether you have classified those transactions as investment or trade, respectively. And this subjectivity revolves around the “FREQUENCY” of such transactions. However, if an individual’s bread and butter activity is shares trading only then this would necessarily be treated as business income.

    I have a query on the LTCG/STCG computation as follows:

    Suppose, I have two demat accounts, one classified as investment and another termed as trade. Further suppose I hold 100 shares of Infosys each in both accounts. Now, If I am selling from any account, how would FIFO be calculated. Will FIFO be based on transactions from respective demat accounts or would it be based on my PAN. I am asking this as this would affect my LTCG and STCG/ non-speculative business income calculations. Additionally, what’s your advice on how to keep investment and trading separate? Should we have two separate accounts? Should we trade in the stocks which we also have as investments?

    Look forward to the answers.

    Many thanks in advance.


    • 1. It depends. As a trader, if you show your investments also as trades, then LTCG is not exempt. As a trader it is best to show investments as a trade/business if the frequency is very high and it is your primary activity.
      2. Yep
      3. yep
      4. yep, not just STCG, even LTCG the same thing.

      The P&L statements that brokers will give will have calculations done based on FIFO of stocks lying in one account with them. IF you want to do calculation of FIFO combined, you can do this yourself while filing for the ITR combining both the P&L from the two brokers based on actual date of acquiring. I know a lot of people advise on keeping two separate accounts for investment/trades, but I don’t think it is really necessary. As long as you can demarcate which are investments and which are trades, even one account is enough.
      But yeah, if you are trading on stocks that are also your long term investments, then best to do it in separate accounts.

  72. Satender says:

    Sir please help me with my query.

    I bought tata steel shares various times in the past so my quantity was a total of 3000 shares at an average price of about Rs 300.

    Few weeks back I bought 500 more shares at Rs 210. Today I sold 500 quantity for Rs 240. So I made a profit of about Rs 15000. But since my overall Tata Steel shares are in loss right now, will this Rs 15000 profit be considered as short term capital gain ?

    • Venu Madhav says:

      FIFO method is adopted to ascertain whether you made a Short term capital gain. So to check if you made a gain or not by selling the shares at 240, you’ve to check what price you’ve bought it first (if you’re still holding the 3000 qty). Post such computation, if you’ve made a gain and if the holding period < 1 year, you'd have to pay STCG, if holding period >1 year, you’re exempt from paying taxes since its a Long term gain.

  73. ASHISH says:

    i have made intra day trading of Rs 26 lakh both purchase and sale in just 15 days and earn only 6000 net profit after all losses being settled. should i require to get my account audited if this is going so on ??? and should i be afraid of getting income tax notice ??? as i am only small investor and age only 22 with no other father gives me rs 50000 to invest and i used to make intra day trading by using this money.. kindly advice.
    thanks in advance….

    • Ashish, if you are trading, you need to ensure that you file your returns at the end of the year. Turnover is not trading turnover, check this module: As long as u file your returns on time and correctly, no need to worry about notice.

      • ASHISH says:

        thnx nitin for your advice…
        still some doubt in my mind ;

        1. if i have only speculative business then would i get attracted tax ability of flat rate of 30% like business income after deducting all expense?would it be fall under ITR 4???

        2. could i use ITR 4S for speculative business ??

        3. suppose my trading turnover is 500000 and my profit is just 25000

        * would i require to get my account audited ?? as my turnover is less than 1 crore and profit is less than 8% i.e. 40000

        *would i require to maintain books of accounts???

        *if i maintain than would audit requirement persist??

        thanks in advance for your valuable advice.

  74. jay says:

    I am totally nervous as to tax return notices etc. and not many CAs are well aware of the tax rules in case of F&A trades, as none of them is very clear even about turnover aspect in F&O, your blog has been a big help. I have a few queries which average CAs are not able to satisfactorily answer and get conflicting views. Sir, I have been trading in F&O and short term deliveries since years, say 2006-2007. In so many years I usually made losses and my total income from any other source was never above 1 lac. As i never thought I had taxable income, so I did not file returns ever. Was it necessary on my part to file returns whereas I never had taxable income all these years ? and If i have not done than what should I expect from I.T. deptt and in such case when there is no taxable income from all sources together and in F&O too I have made loss only, was i liable for tax-audit all these years ?

    2nd, in another account I actively traded and made a loss of 3.5 lac in F&O and short term capital loss in fin year 2013-14 and I filed the return with losses but the person who filed my ITR, wrongly used ITR2 showing all losses and short term capital loss whereas mostly had been in F&O whereas, as is clear from your blog, it must have been ITR4, I filed the ITR on 31.7.2014. He told me that my loss will be carried over to next year. Next fin year 2014-15 I made about a profit of 17 lac from F&O trade and in delivery based also made some profit but through bonus adjustments of Infosys and Hcl tech I managed to show loss of about 7 lac as STCL. My quiery is, can this STCL be negated from my F&O profit ? 2nd, can my carried forward loss of 3.5 lac filed through ITR2 be negated from my this year F&O profit ? 3rd, If i hold my Infosys bonus shares for one year, will that be exempted from income tax as LTCG ?
    It has been too exhustive, hope i get the answers.

    • 1. IT department has been sending notices from year 2012-13 right now. So everything before that you are okay I guess. But if there is no tax liability as in your case, even if you have not filed it is okay. You can meet the IT department if any notice is received and show them that u didn’t evade any taxes. If there is no tax liability, no need of an audit.
      2. No the carried forward STCL can’t be set off against F&O/business profit. Yes, if you hold the bonus shares for a year, the gain is exempt under LTCG.
      Check this:

  75. konda says:

    mr nithin
    ihave been trading with zerodha for the last four years.since then i have been making loses year after year. since i am making loses every year i thought that i dont need to file returns.
    today i recevied notice from it dept.they wanted me to file returns for 2012-2013 finacial year.
    when i logged in to back office i could not find tax p&l from drop down box for 2012-2013.what i am supposed to do . please advice

  76. Shammi Theodore says:

    Dear Nithin,
    I am a client of zerodha. I have a the following income:
    Freelance Software Development: 3.3 L
    Equity Delivery (Gain): 3.86 L
    F & O (Loss): -4.53 L

    Can my F & O Loss be set off against my equity gain first and the remaining against my freelance income. I then pay tax on the remaining freelance amount after set-off?


  77. Harshal says:

    Hiii Nithin,

    Can i link my current account to zerodha a/c to transfer funds like saving a/c?
    this a/c is my firms a/c and i am the proprietor of this firm??


  78. Varun says:

    Hi Nithin
    I have been trading in FNO since 2013,never been in profits lost around 3 lks and i don’t have any other income
    Is it mandatory for me to return (as TO is below 1 cr and profit is lessthan 8% of it) do please let me know

    Thanks in advance

  79. Nazir says:

    Hello Nitin:
    I have performed the following types of trades:
    1. Intraday trading in Equity
    2. Intraday in FO both options and Futures

    My overall income for the AY 2015-16 is less than 2.5 lakhs. Can I use ITR4S to file my returns?


  80. Sandeep says:

    Thanks Nitin

  81. Bonny says:

    Hi Nitin,
    I am salaried person and i did intraday and short term trades in stocks. I made net loss in intraday trades and net profit in short term trades. My turnover is less thyan 1Cr. Do i have to get my accounts audited while submitting ITR4?

  82. sandeep says:

    Hello Nitin ,sorry if i am reinventing the wheel ,but really confused between ITR 4 and ITR 2

    I am salaried with sal <10 Lks .My losses in day trading Options for the last one year are around 60k .
    Do i need to fill ITR4 .I dont have anything else to fill there like land ,second house etc.
    ITR2 also looks similar and making sense to me.
    Or is it that ITR2 will be only for equity based capital gains and no losses at all.

    In ITR4 ,i hope you didnt mean ITR4S at all (with presumptive business).

  83. Prabsharan says:

    Hi Nithin,

    The Trade wise turnover statement is not getting downloaded. It is showing a blank page instead.

    My is DP0534.


  84. Karthi K says:


    Please share your petition in Zconnect and tradingqna.

    So people can sign the petition.

    Hope Govt will give some relief on this.


  85. Kumar Aish says:

    Hi Nitin,

    I have made 4707.89 from Speculation Income (STT paid) (Intraday Profit) and 71603.42 from STCG.
    Do I really need to fill ITR 4 or can I just fill ITR 2 and show “Speculation Income” as “Other income” ?

    What if I need to fill ITR 4 – then do i need an audit and have to keep book of accounts ? Not sure what that means in context of Speculation Income and STCG.


  86. Saurabh says:

    Hello Nithin,

    I have a taxable salary income of Rs 3,50,000. Also, I traded only stock options in last financial year with total turnover of Rs. 3,56,582 and incurred a loss of Rs. -1,09,000. Do you I need an audit to file my IT returns and carry forward this loss?

    Thanks for your reply.

  87. sarnifty says:

    Dear Nithin

    I’ve futures & options turn over of 100000. To avoid audit, I show profit of 8000 (though I’ve have made loss in reality). Now, from this, can I deduct all the charges (brokerage, stt, advisory, broadband etc..) ?


  88. Rajiv Jamwal says:

    Dear Nitin
    For fling ITR4 as a FNO trader, do we need both the purchase and sale transactions and turnover to be mentioned in the return or just total FNO turn over is sufficient

  89. Kumar says:

    Hi Nithin,
    My salary income is less than Rs.2.5 lakhs for FY14-15. Using Tax P&L, my total business turnover across segments is approx Rs.9 lakhs and my total gross profit/(loss) is Rs.(1,90,000). Is it okay if I file ITR-4S this time – adding 8% of 9 lakhs=Rs.72000 as presumptive income, which shall now make my total income as around Rs.320000?
    Kindly advise at the earliest.
    Thanks in advance, and appreciate your support.

  90. DK1186 says:

    Hi Nitin,

    Have a requirement for the Tax P&L Report.
    1) For trade in Cash Market, the brokerage, service tax, stamp duty etc (other than STT) can be included for calculation of the price. However the Tax P&L Report does not consider the same. Request its introduction in the report. Also I believe all P&L calculations for a particular script will be as per FIFO.

    2) What is considered as frequent trading. Is there a basis for defining a trade as business or investment.


    • 1. Yes we are working on showing charges separately for each scrip. Currently it shows total charges for the year. Even that should be okay for your P&L. Yes all calculations are as per FIFO.
      2. Nopes, there is nothing to define frequency of trading.

  91. Prasanta Mazumder says:

    Hi Nithin,

    My income is below 2.5L including salary, short term trading, intraday trading and F&O trading. So I do not have to do audit for filing ITR4. My queries are:

    1. Is it necessary to fill up Balance Sheet of ITR4?
    2. Which part of the P&L of the ITR4 needs to be filled up? Is it part where regular books of accounts are maintained or part where regular books of accounts are NOT maintained?

    Please clarify.


  92. mpatel says:

    I am having NRI account with Zerodha, my bank is debiting from my PIS account Short term capital gain tax same time when I sell a share. My question, what is the procedures of filing tax returns as tax is already deducted by bank? Please explain in details.

    • You will have to file ITR2, and since tax on STCG is already paid, there is no need of paying any taxes. But while filing ITR2, you will have to show any other income and pay taxes if any on that. I guess it is best to speak to a local accountant/CA to do this for you.

  93. Sharat Chandran says:

    Hi Nithin,

    Not sure if you saw my query…can you please advise?

    I have my account with Zerodha..I have done some F&O trading last year with a turnover of 1.5L and net loss of 40K. I have a salary of around 12L…Do I need to get a tax audit done? or can I file my returns myself?


  94. Ninad says:

    script wise turnover 38 lacs net of positive/negative balances

    trade wise turnover 62 lacs net of positive /negative balances

    Can i file ITR4s and declare income @8% of turnover and which turnover should i take script wise or trade wise

    Can anyone really answer this .Even CAs dont know about this stuff .

  95. Hi Nithin,

    I have my account with Zerodha..I have done some F&O trading last year with a turnover of 1.5L and net loss of 40K. I have a salary of around 12L…Do I need to get a tax audit done? or can I file my returns myself?


  96. Rohit says:

    I traded in FY 2014-15 in F&O and commodity and my F&O turnover is 639746 and Total profit 466 Total charges 3056 , So my net loss in F&O is 2590. in commodity Total turnover 10200 Total realized profit -4200.Total charges 1393 So net loss in commodity is 5593. AND IN TOTAL MY TURNOVER IS 649946 AND NET LOSS IS Rs. 8183. (as per TAX P&L sheet provided by zerodha.)
    I don’t have any other income except some saving bank interest (lesser than Rs. 500).
    I have never filled ITR before. Kindly tell me.
    1. Is it must to file ITR for me ( as my total income is less than 2.5 lakh) ?
    2. if Yes . than can I choose ITR 4s or I must go for ITR4 ?
    some where I read that For ITR 4, audit is must. but some says if total income is less than 2.5 Lakh audit is not required.

    Kindly clarify

  97. Prasanta Mazumder says:

    Thanks Nithin for the clarifications. Regarding point no.2, I did not select “Residential Status” while calculating the tax, once I selected “Residential Status” as Resident, it started working correctly.

    I have one more query:

    Where do I need to put my equity F&O profit and day trading profit in “Balance Sheet”, “P&L”, “Schedule BP” columns of ITR4? I have not maintained regular books of account myself.

    Please clarify.


  98. Prasanta Mazumder says:


    Could you please clarify below queries:

    1. If I do stock(equity share) trading as a business, what business type needs to be declare as “Nature of Business” in ITR4?
    2. In ITR2 and ITR4 Java utility forms downloaded from ‘’, if I show salary as 1L & short term capital gain as 50000, it is showing I need to pay tax for 50000 @15% whereas it should be zero as my total income is 1.5L (below 2.5L). Is there some issue with the forms? Can you please suggest any other way to file ITR similar to java utility forms?
    3. I have few F&O trading and day trading in equity in last FY & also some short term trading where frequency is not so high (average 7-8 trading per month), can I show F&O and day trading as business income and short term trading as short term capital gain in ITR4?


    • 1. Nature of business can be mentioned as: Trading-Others (Code: 0204)
      2. I think there is some issue with the java utility. Can you also check if you have mentioned yourself as a NRI (In NRI case, short term gain is flat 15% and can’t be adjusted with minimum income). If the java utility is not working right, try the excel one.
      3. Yes you can.

      Check this module we have taken live, has all your answers:

      • TP says:

        Hello Nitin

        I think your point 2 is not correct.

        “If your total taxable income excluding short term gains is less than the minimum income which is chargeable to tax (Rs 2,50,000 for financial year 2014-15) – you can adjust this shortfall against your short term gains. Remaining short term gains shall be then taxed at 15% + 3% cess on it.” — from Cleartax

  99. Chetan says:

    I am Salaried person. I have made some losses this year in F&O. My question is, do I need to get my P&L from F&O audited as I made losses (less than 8% profit condition). Please advise.

  100. sarath says:

    hellow nithin,

    i am new to trading i just start it but i don’t know anything about taxes please explaing when i pay taxes ,if i get loss can i pay tax , if i get profit what is the limit for taxfree? when will i start pay tax ?

  101. Longchars says:

    Hello Nitin, I have recently joined Zerodha and am actively trading in F&O. Btw Pi is simply great with all the new additions.

    I have a query.. Since i am from Nagaland and belong to Scheduled tribe i am still not clear whether i should sign up for income tax as normal conditions are that these category falls under IT Exemption.. kindly advise.. TY

    • Thanks.

      This is a grey area. Ideally if the income is from trading equities it is best to file your returns. The exempt category for ST from Nagaland is typically meant to encourage local businesses and employment. Trading in equity, hmmm.. tough call… You could probably get away by not filing, but best to consult a local CA once.

  102. Varughese K Eappen says:

    I am not getting my Profit and Loss reports for Equity from but I was able to download the same for FnO and currency. Also I am unable to download the Tax on P&L reports though I am able to view the details in the browser. My trade code is RV0431. Is anybody else facing the same issue?

  103. vasudev says:

    my profile is trader + investor. possess trading losses/income from speculative, non-speculative, short term CG and long term CG.

    My understanding is that while filing ITR4 , i can still show my long term holdings as investments while the rest bundled under business income instead of CG.
    when I analyse my transactions ( all equity delivery ) for the last FY 14-15, the net is loss 6 L which is +4 + -8 + -2.

    “i made profit of 4 L ( which contains stocks bought > & 1Y) = 8L, short term capital loss( buying date < 1 y) = 2 L. this is excluding the whole year's brokerage charges etc." Q1. fy 14-15 : I just want to know whether i do it right while filing ITR 4 , i do not have to segregate the losses & profits originating from short term /long term trades. i will show 6L as business loss so that I can set off against my profit 13L in Fy 15-16. i keep my LT stock holdings for LT CG. Q2. FY 15-16. Advance Tax. think that my net business income till 14 sept15 is 13L. when I pay advance tax, should i take 30% of 13L or (13-6) L ? TIA

    • 1. If you are showing stocks held for more than 1 year as trades and not capital gain, you will have to continue following the same method in the future as well. You can’t show long term capital losses as trades, and at the same time take the benefit of long term capital gains on your profitable trades. But yes, you can show 6L as your business loss and set it off against this years business profits.
      2. You can pay advance tax on (13-6), as this 6 will anyways be reduced from your total business income at the end of the year.

  104. vasudev says:

    ref varsity tax module. pdf file. page 13. item4 carry forward F&O loss. the text mentions that the loss can be carried forward for 8 Y and can be adjusted against any business income, not limited to non-spec income.
    – while the table below displays , under carry over- “yes” for same head and “no” for any other head – suggesting it can be only adjusted against non-spec gains

    which is true ?

    thanks for the excellent effort, Nithin.

    • Vasudev, what is on the module is correct. The same year you can net off non speculative income against any other business income. When you carry forward, it can be net off only against the same business head (in this case non-speculative income).

  105. viju_1105 says:

    I have been in touch with your back office since 17 th. July.Your team is not yet able to debug the software which generates Tax P&L reports. I still do not know which figure of short term capital gains should be used in IT return. Has it happened in my case or some body else also?

  106. chethan says:

    I wish to know is it necessary to pay advance tax if I make loss till half year. Hear are two scenarios
    1. Assume I make loss in FnO but Salaried, net income is profit.
    2. Assume I make loss in FnO but Salaried, net income is loss.
    Thank you,

    • Chethan, no need of paying advance tax if your trading income is negative. There is no need of paying any separate advance tax for your salary, as your company will probably already be deducting TDS.

  107. SP says:

    Hello Nitin

    I am new to Zerodha and would like to congratulate you for developing such an awesome platform and for your initiative in creating such a rich information resource. The clarity of your answers is to be truly appreciated. Obviously it comes from a deeply understanding of the issues involved.

    I am from Kolkata and am considering opening an account with Zerodha shortly.

    I have a few questions for you –

    1) Does Zerodha provide a certified copy of P/L at the end of a FY for taxation purposes?

    2) If you do, then what is basis for treating ST income in case of a share that has been bought and sold multiple times in a FY – is it treated as STCG or business income? If as STCG, is it found acceptable by the IT department? Also is all income from other shares which may be purely LT risk being categorised as business income?

    2) How does one distinguish between stocks-in-trade and for investment within a single demat/trading account? The IT circular referred to above considers frequency of trade as important in determining the investment as trading or LT investment without quantifying the frequency? Such vagueness prevents many (myself included) in arriving at a clear stance on trading/investment. The max. no. of litigation in tax cases involves this issue. To my mind, if frequency is to be considered, then one might as well quantify it.

    If you can shed light on these issues, it would be greatly appreciated.

  108. Honey says:

    Is there any other Contact no of zerodha for call and trade since i noticed so many even right now i am trying to call on 40402020 but its shows busy. Opening and closing its very tough sometimes have to wait for even 15 mts. This is a genuine feedback.

  109. Honey says:


    I have a net salary income of 6.5 lacs for the year 2015-16. Till now i have made a profit of 1.2 lacs in option trading.

    1. What is the tax rate for 2015-16 for option profit i have to pay.

    2. I have a loss in option and futures of around 1 lac in 2013 and 2 lacs in 2012. can i adjust those to my current year profit.

    Thanks In advance

  110. Syam says:

    Respected Sir,
    I incurred a loss of Rs. 23000/- on intraday trading of equity shares during the year 2014-15, with total turnover(intraday) of purchases and sales worth Rs.48000 thousand during the year. Can I set off the above trading loss of Rs.23000/- against my salary income (1, 76000/-) to get the Income tax benefit? However audit is needed by CA and show losses in income tax returns even I got loss. Would you provide your valuable suggestion.
    Thanks and regards,

  111. chethan says:

    I wish to know is it necessary to pay advance tax if I make loss till half year. Hear are two scenarios
    1. Assume I make loss in FnO but Salaried, net income is profit.
    2. Assume I make loss in FnO but Salaried, net income is loss.
    Thank you,

  112. eku says:

    Hello Nithin Sir,
    how r u 🙂

    Pls answer my these 2 small queries.
    1)Is it really mandatory to file a return when my income from trading F&O+other sources is below 2 Lacs.
    2)Last year I didnt file the return(AY 2014-15).If I want to file it,is there any fine?


    • Venu Madhav says:


      1) Filing your returns doesn’t necessarily mean that you have to pay taxes. You can still file your returns if your income is less than Rs.2 lacs. Its always better if you file your returns as it helps in a lot of other things like obtaining a bank loan etc.

      2) You can file your returns for the last 2 years if you’ve missed filing. There wouldn’t be any penalty/fine, but if there’s any tax liability, you’d have to pay it along with interest.

  113. Nimesh says:

    1. For audit purpose is it total turnover (Equity, F&O, Commodity) counted or separately for each segment,
    which is more than 1 Cr for audit?
    2. Also if profit is less than 8% of turnover the also audit is compulsory but what if profit is more than 8%
    or are having loss? Still it is necessary?
    3. Can we compensate losses in commodity against profits in F&O ?

    Thanks in advance.

  114. chethan says:

    I wish to no while filling itr4 upto how much we can show business expenses. Also can I show lic paid for parents(any limit on this).
    Thank you,

  115. Satish says:

    Can you please let me know what we should enter in in the rectangle box marked in red (pls refer screenshot in below URL)?

    Presumptive Income for filing ITR-4S under section 44 AD / 44 AE (Filing ITR Sugam)

    Add Income Under 44 AD

    Amount of total Sundry Debtors *
    Amount of total Sundry Creditors *
    Amount of total Stock-in-trade *
    Amount of the cash balance *

  116. Sumit12 says:

    Hi Nithin, I had opened a US based trading account in FY2010 for $1000. But since there was no profit for the trading account (I traded stock options during last five years) and since my taxable income was below Rs. 2,50,000/-, I had not declared my foreign account for tax purposes. But now with Finance Ministers emphasis on declaration of foreign asset, I am confused as to how should I go about declaring the same i.e. Should I use ITR 4 or is there seperate form, which documents should be used to support the declaration, how should the tax be assessed etc.. Kindly help me with the same

  117. Suresh says:

    Hi Nithin,

    My wife has profits in F&O trading and short term capital gains trading equity. However,both put together is less than exemption limit and no tax is payable. She has no other income. Does she have to file returns? She had filed returns in FY13-14 as she had to pay tax on short term capital gains due to trading in equities.


  118. Sumit12 says:

    Thanks Nithin

  119. Sumit12 says:

    Two questions: 1. If i have a trading account in USA (i.e. foreign broker), which ITR form to use for filing taxes as it is foreign asset? 2. If I have float a private limited company for proprietary trading then which ITR form should be used?

  120. Sumit12 says:

    Thanks Nithin, appreciate your efforts to help resolve issues raised.

  121. Sumit12 says:

    Also, if I calculate a certain advance tax based on my expected taxable income (say 10000) and pay on September at 30% (30% of 10000 = 3000) but on March I find my taxable income is more than what I expected based on higher trading profit (say 20000) then what is the way forward?

  122. Sumit12 says:

    If my profit is 16.6% then I believe audit would not be required but if it is 6% then audit is required? Sorry for repeating the query but my text is getting cut down…

  123. Sumit12 says:

    Hi Nithin,

    The second part of the question again:

    You said that if profit8% (10000/60000 = 16.6%) therefore no audit would be required in this case, however if my settlement profit had been Rs 3000 then audit would be required as profit is 6% (3000/53000)


    • 1. Yes it is best to pay advance tax. 30% of the expected annual tax by sept 15th, 60% by dec 15th, and 100% by March 15th. If you end up paying more advance tax, u can claim for refund.
      2. Yep. When filing your ITR4,if you are trying to file with profit less than 8% of turnover in the no audit case, you will get an error.

  124. Sumit12 says:

    Hi Nithin,

    I am an active trader, trading intraday equity as an individual for now. I need to understand about advance tax that need to be paid to IT dept. during September, December and finally March.

    1. Does a trader need to pay advance tax and if yes how is taxable income accounted for each payment period?
    2. You said that if profit is 8% of the turnover?


  125. Vimal says:

    Hello Nithin,
    I have simple query regarding average buy price. Been running pillar to post for an answer and the support team is not able to provide me with a resolution. I am not the kind of person who bad mouth easily, holding my trust in you folks.. can I get an answer for Ticket #114138?

    If its a NO a plain no on the ticket would suffice rather than beating around the bush

    • Vimal, while calculating open position, we have to follow the policy of First in First out.

      So if you buy 1 lot at 100 , sell at 101, and then buy back at 102. The average buy price of your open position is 102. If you want to see your profitability, use the P&L statements.
      Will get our team to write back to you.

      • Vimal says:

        Thanks for your reply Nithin much appreciated

        Lets take an example, user buys one lot each of NIFTY Futures on different occasions/dates and still holding the position of 75

        – 8350 | Bought on June 1 | Lot size 25
        – 8180 | Bought on June 2 | Lot size 25
        – 8062 | Bought on June 5 | Lot size 25

        *Back office shows the average buy price to be 8086 for this lot of 75 – which i am not sure if its correct.
        * Where do one see this value? It shows up under the holding section once you login to BO and i was guided by the support team and assured that the average buy price of 8086 is correct — Is that so?

        If I go by law of averages its not correct and I would be glad if you folks prove me wrong as I can cover my position at the earliest and make a profit

        All I ask if for an assurance that the values shown on BO under my login is correct. Post that I will square my holding & exit with either a meager loss or book profits in a weeks times or so

        I have shared snapshots, trading details — everything that is needed to sort this problem – provided it is one. More than happy to share more info if needed


  126. Lokesh Kumar says:

    Hi Nithin,

    I am working professional. I made short term profit on Equity of Rs 10,000 and Total charges Rs 700. Should I file the tax and at what amount and which ITR form? Thanks

    • Yes lokesh, it is best that you show this short term capital gain and file your returns. Use ITR2 and show this Rs 10000 as STCG, you will need to pay Rs 1500 (15%) as taxes.

  127. Gupta says:

    hello nithin ,
    i was looking at my zerodha back office platform for calculating my profit n loss where i saw a big mistake done by you guys. in order to calculate the profit n loss on tax basis as well as normal P&L you are taking buy n sell price of each scrip by averaging which is wrong, you are combining the delivery trade with intraday trades to calculate average buy n sell price in both tax n normal basis due to which my buying cost increases for the delivery based transaction

    EG- if i bought X share in intraday for rs 102 and another x share for 100 for delivery based CNC then according to ur caculation the avg buy price is rs 101 but for calculating capital gains i have to take rs 100 only ..we cannot merge intraday with CNC ..and same is in the case of normal PL calculation done there u are calculating unrealized profit on the avg price basis .

    One more important thing is that i dont have my dmat account with u guys so if i sell my shares from yes bank account then ur selling side amount will not be incorporated in that short term trades which will lead to inaccurate tax as well as profit calculation.
    instead of this you people should have given trade wise profit n loss likewise turnover.

    please reply important issue


    • Hi,
      The tax P&L currently shows intraday and capital gains separately. I guess the issue in your case is because you are transferring shares to another demat account. Here we won’t get to know ur actual holdings. What you can do is use the tradewise turnover report, and classify which is intraday and capital gain yourself. If you have a demat with us, this shows perfectly.

      Tax P&L shows intraday and capital gains separately, the normal P&L combines everything.

  128. Ram says:

    Tax P&L page does not open from Zerodha Q. I could see it till few months back. But now the page does not open any more. It just shows a blank page. What is the problem? I’m using Google Chrome upto date.

  129. MOHAMMED FADIL says:

    Hi nithin
    when will be the Bracket order option will available in MCX ? please make it soon
    difficult while trading in crude oil due to high volatility fast moving candle can’t chase the target

  130. Vijayan says:

    Hi, I have been in the trading business for the past 10 years or more, but so far I have not filed IT return.
    Can I file IT return from this year onwards ? If so, do I have to submit copy of all contract notes and bank statement for all the previous years (it is highly cumbersome). I am mainly trading in BNF, and the net result of my trading, putting altogether, is LOSS only. Would appreciate your valuable reply.

    • Like they say, better late than never. Yes you can start filing IT returns from this year onwards. Speak to a CA, and I’d say start off by filing returns for the last 2 years. You don’t need contract notes, you will need just P&L statement, ledger from your broker. You will need bank statement for the same period. Check this post to get a better idea.

  131. Rajiv Jamwal says:

    Dear Nitin
    Some queries on Taxation-
    1. Dividends..Is it tax free for both traders and Investors?. I know investors dnt have to pay tax on dividends but how do we, traders, who have some long term holdings treat the dividend income?
    2. If in one year you do some FNo/Cash trading and declare your self as Trader, Can you change your status in next year to an Investor( No trading in that year but just holding long term holdings)
    3.My CA is fling my IT return -ITR-4 thru some software and just puts the profit or loss in trading and total Turn over and my capital gains. Where one has to put this purchase and sale? And for what purpose this Purchase and sale calculation is required. CA says there is no column for putting Purchase and Sales figures in the ITR-4

    • Rajiv,
      1. When a company gives out dividends, the taxes are already paid by the company. So investors or traders, don’t need to pay any tax on dividend income.
      2. Yes you can, but if you do this once too many times, the ITO might have a problem.
      3. The turnover calculation is just to determine if you need a tax audit or not. If turnover more than 1 cr or if profit <8% of turnover you need an audit. In ITR 4 like your CA's says, you can only enter in the purchase/sale fields.

      • Rajiv Jamwal says:

        Thanks Nitin
        I am just bowled over by your clear and prompt reply.
        As mentioned earlier also, although as on now I am not yet Zerodhas Customer, But I have already asked and received the ac opening forms and other documents for the CompanyTrading ac opening formalities . and let me congratulate you that your team also is excellent in prompt reply and quick follow up. For the last 8 years I was so frustrated with Kotak Sec because of their incomplete or evasive replies to our queries. Looking forward to hop on your juggernaut

  132. Ram says:

    Hi Nithin,

    I have bought shares on Jan 15 and sold partially on Apr 15. Made some profit. How and When should i have to pay the tax for the profit amt?


    • Last date for filing the returns have not yet been declared. If you have sold in April for a profit, it can be considered for FY 15/16, so you can file this by next year. But when u r filing returns for FY14/15, show the purchase of the stock.

  133. SALIM KALATHIL says:

    Dear Nithin.

    I am a resident of Ernakulam and I am a Zerodha Trader. Kindly inform whether you have a CA or can u recommend some body to file my IT returns.


  134. MOHAMMED FADIL says:

    Hi Nithin
    Finally I got Zerodha PI in my hand thank for your new innovation
    when i use it i feel some difficult in some setting used in PI compare with some top charting softwares
    i have some suggestion in my view in order to make it easy
    1) while opening chart there is no hand tool (through mouse pointer) fot srolling chart from left to right in PI only arrows key and mouse wheel for scrolling (slow scrolling)
    2)Cross hair tool is missing in PI
    3)change time frame option not available in chart top
    4) Line chart is missing
    5) when we apply 2 or more indicator difficult to remove one indicator plse add a dialog box for removal selection
    6) if add pivot line support and resistance lines to chart it will helpfull for traders
    All of above problem is faced by me when i use PI for first time its my view final decision is yours
    if make little bit changes in settings mentioned above it will be very help full to all traders

  135. sunil baliram kabadi says:

    how can i manage to calculate long term profit as i partly sold with in one year and purchases verious dates and verious cost any bonus share

  136. Mehul Mishra says:

    Hi Nithin
    Do you think you could add “price of purchase” in each of the purchase dates in the drop down ?
    Right now it only shows quantity and days .
    Also will Zerodha ever provide the facility to trade in United States stocks ?

  137. ANSAR says:

    As you said F&O profit/loss treated as business income, then my taxable income will be 4.2 lakh or 5 lakh as it is, if my salary is 5 lakhs & I made a loss of 80k in F&O trade.?
    please do reply.

    • Just answered your query. You can’t adjust your business/trading loss with your salary income.The business loss of 80k can be carry forward and adjusted against any business income over the next 8 years. DO check out the link I have given above.

  138. ANSAR says:

    Dear Nithin,
    My salary is 5 lakh/yr and in FY 2014-15 if made a loss of 80k in F&O, then which ITR form I should file & how much tax I have to pay ?
    Please reply soon & thanks in advance.

    • Since you have traded F&O you need to use ITR4 and declare this F&O loss as business loss. You have to pay tax on your 5lk salary only (around 25k, 10% of 2.5lks based on your tax slab). Check this post for all queries.

  139. Salman Q says:

    Hello sir,

    Also since F&O trading is treated as business income, what all expenses can I use to set off against the profits.

  140. dr.v.mariappan says:

    so much of various taxes &brokerage are paid
    how to a/c this
    just like std deduction or deduct from total profit or certain %of paid tax tobe deducted please elaborate

  141. krishna says:

    Hello Nithin,

    i have one question.
    I am the only earner in my family. what are the tax implications, if my wife trade with money on her name.

    can she show all profits in her account. it seems this way we can get some extra benefit.

  142. Rajiv Jamwal says:

    Still not a client of Zerodha. But looking at Nitin`s zeal, shall be the client in two days. I am in Fno for the last 3 years with Kotak

  143. Tejas says:

    Hi Nithin, specifically for Intraday Equity Futures/Commodity/Currency trader, apart from tax implications is there any restriction in terms of number of trades done purely for speculation in a day.

  144. Kunal says:

    Hi Nithin,
    Suppose my salary is 4.5lacs per annum. and for FY14-15 I made profit of 1.5 lacs. and for Stock holding I am having loss of 2.5 lacks. How much tax I have to pay.

    • Kunal, I am guessing you made F&O profit of Rs 1.5lks.

      If you are going to consider even if your equity trading as a business: your net trading loss is Rs 1lk (1.5-2lks), and this can be carry forward to the next 8 years and setoff against future gains. You have to pay taxes on your salary of Rs 4.5lks.

      If you are going to consider your equity as investments you can’t netoff the loss against F&O profits. So you will have to pay taxes on Rs 4.5lks + Rs 1.5lks

      Check this post, all details you need is here.

  145. Chinmaya Kumar says:

    Hi Nithin,

    As per your above reply I have the following query for the 2014-15 Financial year.
    I have profit of Rs.1890 in Equity and Loss of Rs.1,11552 in F&O
    So i need to show this loss in Row 50 is for purchases section and Profit [Equity as well as F&O]in either row 4 or 5, under sale of goods/services.
    So this loss will be tax exempted ?If I am falling under 10% then i will be getting back around approx.10k

    2.Do i need to file ITR-1 for my regular filing purpose[Salary earning] or there is any provision here in ITR-4 to mention that as well?


    • 1. You don’t have to pay a tax on the loss. But doesn’t mean that you will get back 10% of the loss. What you can do is carry forward this loss for the next 8 years, and you can net this off to any profit you make in the future. Check this post.
      2. You don’t need to file ITR1, you can show your salary earning in the same ITR4.

  146. Sumit says:

    Hi Nitin,

    Thanks for such useful information again and again. As mentioned in most of the replies to consult with CA. My query is for the people like me who don’t know any CA’s and are too scared to go to any unknown CAc(sometime even CAs don’t advice properly), Can Zerodha connect us with some of their familiar CAs. Zerodha being a big name now, I ma sure must be knowing a lot of good CAs who can advice properly and charge appropriately.


    • Sumit, if you are in Bangalore you can visit They will find it tough to support outstation clients especially in case of ITR4. If any scrutiny happens, they will have to travel across. But let me find out from a couple of CA friends if we can setup such a network.

      • Francis Xavier R says:

        Hi Nithin,

        Why don’t have a tie-up with online tax filing websites (with some discount to zerodha customers) like taxguru, taxspanner,etc to upload the Zerodah Tax P&L excel sheet directly into their website for easy tax filing. This will be very helpful for the small retail investor who can’t afford a CA.

        • Francis, ITR 4 is something most of the traders need and what most of these websites don’t do. We are looking for a solution around this though.

          • Francis Xavier R says:

            Tks Nithin. As for as I know websites like,, etc providing facility for all types of ITR including ITR 4. But entering all the trade details in these websites is a very big time consuming work. Thats why I am asking for the tie-up. So these websites will accept Zerodah Tax P&L excel sheet in few clicks.

            • Francis, will get this checked.

              • Francis Xavier R says:

                Hi Nithin,

                Any development/update on this?

                • We are talking to them, but it won’t happen for this tax season for sure.

                  • Francis Xavier R says:

                    Tks Nitish. When you have the tie-up in place, Zerodha will be the first online trading facility in India with integrated tax filing assistance.

                  • Francis Xavier R says:

                    Hi Nithin,

                    You can talk with – their tax filing system is highly efficient for capital gain calculation comparing others.

                    • Venu Madhav says:

                      Thanks, will pass on the feedback to Nithin.

                    • Francis Xavier R says:

                      Dear Venu,
                      Any update on online tax filing tie-up? It will solve an important problem of small investors. You can make biz when you start solving problems and producing solutions (you are in this biz by solving the problem of high brokerage). Hope for good news.

                    • Venu says:

                      There are many portals out there which allow you to do this and hence any effort will only result in duplication. We give you ready generated reports on Q which you can use to fill information.

                    • Francis Xavier R says:

                      Dear Venu,

                      Tks. In all these portal, investor have to enter the details from reports MANUALLY and this is the PROBLEM. Could you tell me, which portal allows UPLOADING report from Q for tax filing? If you have the tie up, then these portals will optimise their system to accept (uploading) reports from Q with few clicks and it will SOLVE the investor problem.

                  • Rama Shankar says:

                    Any developments, sir?

  147. shridhar says:

    need to have training on day trading from zerodha ,if any please inform me.

    thnaks & regards,

  148. Chinmaya Kumar says:

    Hi All,

    I have few query regarding filing Return.
    As I have few stocks holding and i trade on Option and i have downloaded my transaction report for last financial year i.e 2014-15.
    As you mentioned we need to user ITR-4 for tax filing and i have incurred around 70,000 loss in option trading and i want to file as business loss.
    So question is in ITR-4 excel which sheet should be used for filing this?
    Please guide me in this regard.

    • If you are looking at the excel go to the “Profit_loss” sheet.
      Row 50 is for purchases. You could mention the 70k loss on this.

      If you had made profits, you could have mentioned it in either row 4 or 5, under sale of goods/services.

      This is quite a complex task, best to take help of a CA.

      • MUNISELVAM says:

        Dear Sir,
        I have trading on Intra day trading since Jan-2014, my capital total
        invested Rs 1,10,000/- on day trading since, now my capital is less than 50k , here i need to file the ITR. Kindly clarify me.

        Thanks & Best Regards,

        • Muni, if this is your only income it is not mandatory to file the returns (but it is best practice to do so). If you have other income also and you are supposed to file ITR, then yes you have to declare this.

  149. Amit says:

    If i buy today and i sell after 15 days, then another scrip buy and sell after 15 days..and continue doing this kind of trade for year. after one year i made profit of 1 lac.. and i don`t have any other income or job..
    and i dont to is it still require to file ITR. And what if i dont file ITR because i am not intraday trader, and my overall income is less than 2 lacs..

  150. Sudhir Kumar Jha says:

    Hi Nithin,

    Is it possible to adjust my income tax from salary with the loss incurred in Future and Option segment.

  151. Himanshu Jagtap says:

    Hello fellow traders,
    How the taxation will be in this situation?
    Income source: Day trading & FnO(speculation) , swing trading stocks in cash( STCG)
    Total Annual Profits(Income) : 2 Lacs( 1Lac in speculation + 1Lac STCG)
    How much tax the trader has to pay?

    • Himanshu, since your total income is less than Rs 2lks, there is no tax that you have to pay. (assuming you have no other income). But do file your returns even if there is not tax liability. Check this post.

  152. SaikiranGarapati says:


    I could not able to find no.of days for my shares in Back office..Is it available for only PI or in Back office also?

    Thanks to Zerodha Team and Great work guys..Very useful to retail investors like me..


    • chandu v says:

      You can see No of days passed for each stock under
      Portfolio>holdings>click on + symbol on any script you can find number of days for each script transaction

      • Vikram says:

        The ‘No. of Days Passed’ does not reflect even when we press + symbol. Actually the section is blank. I believe this should be accessible even during off market hours.

  153. Mark Pereira says:

    For clarity and Distinction between shares held as stock-in-trade and shares held as investment – tests for such a distinction, please refer circular 4/2007 dated 15-6-2007.

    • Circular from where? Do you have a link for this.

      • Mitesh Lad says:

        Here is the link to the circular

        Primary importance is given to who the stock are treated in books of accounts, If treated as stock-in-trade than sale is treated as business income, if the stocks are shown as investments in books of account than sale is treated as Capital Gains.

        This is the first step towards distinction between business income and capital gains. Second step followed is to look at frequency of trades and purpose of buying and selling shares. If frequency of trades are higher for a particular case and shares were bought & sold for the sole purpose of making profits, then such income will be treated as business income. While if shares were bought to derive income from dividends and frequency of trades were not high enough than sale of such shares will be treated as capital gains.

        It is advised to the investors that they maintain proper books of accounts by clearly distinguishing their portfolios as stock in trade and investments. So that during a case of inquiry they can explain their case to the authorities and prevent unnecessary scrutiny. It is further advisable if portfolios are completely separated from each other in different DEMAT accounts so that trading and investment activities are completely separated and it is easier for the investor to present their case.

      • Swapnil barapatre says:

        I m active trader .so I declare all my income whether it is intraday , short term or delivery as non speculative buisness income . My query is what will be the turnover for short term trades . It would be calculated as non speculative or short term delivery.

    • Yash says:

      Hi Nitin,

      please help for below situation:

      what if i don’t want leverage and trade with my money only ex. if i buy share on CNC and sell them on same day then should i pay short term tax on gains(profit). and can you please clear me about different rates and slabs for abovementioned trades. and what are the applicable tax on gain via intraday.

      In hope of your answer