Need help on Tax return filing


First time posting on TradingQ&A.
Till now I used to file ITR1 but this year I started trading and got some losses. The process of Tax filing for trading income is making me very confused.

For FY20-21 below is my income summary:

Salary received - 4,92,682
Intraday Equity (Net) - 11,451 (Loss), Turnover - 13,711
F&O (Net) - 1,63,356 (Loss), Turnover - 4,41,505
Total Turnover - 4,55,216
LTCG - 4,040 (Loss)
STCG - 18,539


  1. Which ITR I need to file?
  2. Is audit compulsory in my case?
  3. If audit is compulsory, is there a way to avoid it?
  4. Can losses be carry forward without audit? or audit is mandatory to CF losses?

@Quicko can you.

Hi @namanchand1995

  1. Trading in F&O and intraday is considered as a business activity and ITR-3 is the business return. You need to file ITR-3 in this case since you have traded in F&O and intraday.

  2. Audit is not compulsory in your case if in any of the 5 previous years you have not opted in and then opted out for presumptive scheme.

  3. You might get the defective return notice if the audit is compulsory and you file the return without an audit report. It is not suggested to avoid it.

  4. Yes, you can carry forward losses without audit also if audit is not applicable to you as per section 44AB of Income Tax Act.

Hope this helps!

It would be ideal to get in touch with an experienced auditor or a CA to get over the confusion of filing taxes.

Can you explain me 5th point on this image.

What do you mean by trading entries more than 250 ?

I have taken this screenshot from below link.

@anon1649903, In case you are a Zerodha trader, the number of entries is not applicable. A plan might be required if turnover is more than 5 crore. If you can drop your contact details on Quicko | Contact Us our team will reach out to you and will be happy to answer all queries :slight_smile: