Nowadays, many people have started investing in stock market to earn some passive income. Especially a boost could be seen at the time of lockdown when people were in their home, the sources of income were less and people started investing in stock market to earn some income.
Among this the salaried group of people are the one who are actively into stock market, they invest in stock, do F&O trading, intra day trading etc.
However they are confused as to how to file their return of income, where to show such income or loss, which ITR to choose and whether to claim loss or not. So in this post we shall discuss such questions and try to answer them.
The first question and the most basic question would be: Is one required to show such transaction in the return if there is no sale or there is a loss in the sale?
The answer would be if there is no sale no need to show it in the return and if there is a loss, it is recommended to include it in your return of income and carry forward the same as same would be helpful in future when you earn profit. We have discussed on it in detail in our earlier post for who needs to file return of income.
The second most common question is whether to show such income in the same return with salary income or separate return of income. We have also answered this question in our earlier post relating to myths of income tax return wherein we have said that for one person one return of income can be filed even if he is earning income from different sources.
Now the most important question: Which ITR to file?
The answer would be it depends on the quantum of trading and what type of transaction is done. Generally if a person is doing transaction in delivery based shares then ITR 2 needs to be filed and show such transaction under capital gain.
If F&O and speculative (intra day) transaction is done ITR 3 needs to be used.
Also the turnover in case of F&O and intra day transaction would be calculated differently and you can read about the same HERE.
However, we would still recommend to consult a professional before filing return of income.
To book consultation with our experts or file return CLICK HERE.
Yes you have to show F&O income as business income and reduce expense related to business from F&O income.
If i am a salaried person working from home and i also trade in f&o stocks, can i show this as my business income and deduct business expenses from my taxable income or profits??