Income Tax FAQs
FAQ On Share Trading Income
1) What is the tax liability on intraday trading of shares?
The income from intraday trading of shares is speculative business income. The income is taxable as per the income slab rates.
2) Can I claim deduction for expenses incurred for intraday trading?
You can claim deduction for expenses incurred in relation to intraday trading. You can claim deduction for expenses such as broker’s commission, internet charges, Demat charges, telephone expenses and other office expenses.
3) What is the turnover in case of intraday trading?
The turnover for intraday trading is the aggregate of absolute profits reduced by losses incurred on the day trades.
4) Does tax audit apply to intraday trading of shares?
The requirement of tax audit is applicable in case the turnover in intraday trading exceeds the tax audit limit of Rs 2 crore.
5) Should I file an income tax return in case of intraday trading?
You are required to file an income tax return in case your income is above the basic exemption limit of Rs 2.5 lakh (Rs 3 lakh for senior citizens). Also, you should file an income tax return to carry forward loss from intraday trading. The carry forward is available for four years succeeding the year of loss.