• Regarding speculative trading taxation

I engaged in some intraday trading in fy 2018 which resulted in net loss of 1198 rupees. The total turnover was 1527 rupees. I am a salaried person having annual income less than 2.5 lakh. I don't have income from any other sources. Since intraday trading comes under speculative business income, do I have to fill ITR, and if yes, which form?
Asked 5 months ago in Income Tax from Udaipur, Rajasthan
No need to file ITR if the Gross total income i.e. salary and intraday gain is less than 2.5 lacs annually.

Let me know how you have calculated turnover.
Vivek Kumar Arora
CA, Delhi
1531 Answers
35 Consultations

5.0 on 5.0

Thats fine. The total of positive and negative will be considered as turnover.
Vivek Kumar Arora
CA, Delhi
1531 Answers
35 Consultations

5.0 on 5.0

Hii

turnover is your value of sales in case of business, but if you had done few transactions then you have to show profit/gain from such transactions as STCG(short term capital gain) and file ITR accordingly.
Lalit Bansal
CA, Delhi
559 Answers
37 Consultations

5.0 on 5.0

It is fine not to file ITR if hour income is below 2.5 lakhs.
Regards,
Nikhil
Nikhil Khanna
CA, Mumbai
1286 Answers
14 Consultations

5.0 on 5.0

HI,

Since you have been doing speculative business, it is mandatory to report the transactions in the income tax return. In case of loss situation you may report the same under capital gain to avoid tax audit if the number and value of transactions is very less.

The ITR form which you should use is ITR-2 in such case. If you wanna report under the business head, then you have to use ITR 3/ITR 4 depending upon the case.

Thanks
Damini

Damini Agarwal
CA, Bengaluru
269 Answers
13 Consultations

5.0 on 5.0

Yeah, you cannot use ITR 2 to report speculative loss. And it is also correct that you need not file the ITR in case your total income is less than 2.5 lakhs. 

But in case you want to carry forward your losses, then it is mandatory for you to report the speculative trading transactions. Moreover, it has been the past experience that in case of trading transactions, if you do not file anything in the tax return, then you may have chances to get the notice from department enquiring on the same. That's why I suggested that it is safer to file an ITR and report the losses. There wouldn't be any tax liability. However, you may opt not to file anything.

Secondly, I mentioned ITR-2 because, you have incurred losses from intra day which cannot be carried forward unless the tax audit is done. Hence, rather than reporting under business income, you may report under capital gain head if the transactions are very few.

Thanks & Regards,
Damini
Damini Agarwal
CA, Bengaluru
269 Answers
13 Consultations

5.0 on 5.0

Please share your zeroda account on my email I'd .com.Turnover is 1527 and loss is 1198 which intself shows there are few transactions which can not be considered as business and there is no necessity to maintain books of accounts.

Coming to capital gain point loss will remain same i.e. 1198, the only question is whether it is short term or long term. If you want to claim loss in future against profit then you need to file ITR.

To check the above I need zeroda statement for further reply.
Vivek Kumar Arora
CA, Delhi
1531 Answers
35 Consultations

5.0 on 5.0

Since your loss is minimal and income is below 2.5 lakhs It is fine not to file ITR.
Nikhil Khanna
CA, Mumbai
1286 Answers
14 Consultations

5.0 on 5.0

you can file ITR 3 .
Swati Agrawal
CA, Indore
667 Answers
1 Consultation

5.0 on 5.0

Hi,

If your gross taxable income is less than 2.5 lacs, you are not required to file return.

However, considering the practical situation, in order to get rid of receiving notice in future, I would recommend you to file return.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards
Abhishek Dugar
CA CS B.Com
Abhishek Dugar
CA, Mumbai
3566 Answers
158 Consultations

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA