Income Tax on Trading

Nature of Trading: Stock trading involves various financial instruments like shares, mutual funds, and commodities. Tax Classification: Equity delivery trading is treated as capital gains, while other forms like intraday and F&O are business income.

Speculative vs. Non-Speculative Income: Speculative income includes intraday trading, while F&O trading falls under non-speculative income. ITR Filing: Capital gains require ITR-2, while business income needs ITR-3 or ITR-4 for Presumptive Taxation Scheme users.

Tax Rates: Slab rates apply, with different rates for the old and new tax regimes. Advance Tax: Quarterly payments are necessary to avoid interest charges under Sections 234B and 234C. Loss Set Off: Losses from trading can be set off against gains for up to 8 years.

Trading Turnover: Calculated differently based on the type of trading activity. Tax Audit: Applicability depends on turnover and profit/loss, with exceptions for digital transactions. Tax Loss Harvesting: Strategy to utilize unrealized losses against realized profits to minimize tax liability.