Day Trading and Tax Applicability

General
1

Hi Everyone,
I have made loss of approximately 13k in day trading and have understood that it is not meant for me. So I have decided to just concentrate on investment rather than day trading. I have made losses in last financial year as well but its a meager amount. Turn over 210 and loss of 104. Since one of the section of income tax says if turnover is less than 2 cr and profit is less than 6% then you have to get books audited. Now my question is,

  1. Can I show profit of 6% over the turnover although I have made losses, and pay taxes accordingly, and get over with tax audit requirement ?
  2. I am a freelancer. I have income in 10% bracket, but after 80C deduction it comes under 5% bracket. So, if I show 6% of 210 as profit = Rs 12.6 as profit, and pay 5% of 12.6 as taxes = Rs 0.63 as taxes, then I can avoid tax audit?
  3. Can I show freelance income and speculative business income (day trading) under same head? If yes, then do I need to pay taxes on the speculative business income separately. I am paying taxes on my freelance income TDS deducted @ 10%.
  4. Which ITR should I file ?
  5. I do not wish to use presumptive scheme of income tax?

Can someone with knowledge on the above topic shed some light as I am little worried and confused.

2

Before anyone can answer this - you need to specify the loss in which form of - Day Trading -

  1. Equity
  2. Derivatives (FnO / Currency / Commodity)
3

I have traded only on Equity segment.

4

Then it is speculative business income. You have incurred short term capital loss. No audit required. Can be set off with gains across 4 years. You will fill ITR2.

5

I have squared off positions on same day. What I have read over all the places, “Day trading is speculative business income.” Even the “Tax P&L” of q-backoffice shows Intraday Gross Turnover and Intraday Gross Profit. Short Term Turnover = NA and Short Term Profit = NA

6

Yeah … My bad. This will make it crystal clear - taxation

I should read it again … :wink:

7

I read the entire chapter but it doesn’t answer my query. According to the chapter I have to get my books audited, but I do not wish to pay extra 15k for audit.

“So, can anyone with info on taxation help me with posted queries”

8

Can anyone please suggest how can i get over with tax audit requirement in my case?