Selling shares on T+1/T+2 - Intraday or STCG Tax?

Taxation
1

Hi,

If i buy a share and sell it on T+1/T+2 day before taking delivery, is it considered as intraday or STCG for taxation purposes?

Zerodha taxpnl considers it as STCG but couple of other taxation softwares like mprofit take it as intrday? What is the correct treatment of it?

1 Like
2

If you have one or two odd trades like these (BTST), then it can be treated as STCG/L. But if most of your trades are like these, then you have to classify them as speculative, otherwise if an AO catches, he will ask you to do the same.

3

My query is what is the right way to treat it given Zerodha taxpnl treats it as STCG.

4

dependes on this condition. Are you doing it regularly on once in a while

5

Whether to file ITR -2 or ITR -3 … I have profit in STCG and loss in Intraday… I just calculate taxable profit in zerodha and put amount in STCG and paid taxes and filed ITR 2 … Turnover amount is found 82000 …Do i need to revise my return or it is correct

6

You don’t have to use any of following ITR -:
ITR-1, ITR-2, ITR-4 even if you have traded in speculative business ( Intraday) or non- speculative business(F&O) even if you faced loss in trading. And capital gain on equity are taxed on and set-off under capital gain. You don’t need to set-off against loss inquire from business. And make sure intraday loss are set-off under intra-head that is against speculative income. And business income are set-off against other than salary ,capital gain. If you trade stock on delivery basis frequently you can treat that as business income. But in point of view you don’t take stock-in-trade rather you treat it as stock-in-investment.

So according to your question will you have to revised itr u/s 139(5), then my answer will be yes and always. You should not consider intraday loss as capital gain loss and set-off against it . You will face lot of problem later on. Might get defective notice from AO.

You can use @Quicko website or application for this purpose.
Make sure to claim expenses that was for business from brokerage, stt to other expense like telephone bill , internet charges, stationary too and don’t claim cash based expense you could be face audit if you bleached 5% limit for cash expenses.

Not a professional guidence.

@Quicko correct me if I am wrong.

7

If BTST selling is :

  1. Short Term Capital gain or Business Income…?
  2. if BTST done frequently ( like 7 to 10 times in a month) considered as Speculative or non- speculative business income…despite the fact that STT is paid on buying BTST stocks…but in speculative Stt is paid on selling only…
  3. If BTST is speculative then why Zerodha and other brokers Show it in TAXPL under Short term…? Is there anyone who did BTST frequently like 10 times in a month or more and showed in STCG in ITR filing… or as Speculative or non- Speculative Business income…in ITR ?
    I believe there should be a firmed rule either speculative or Non- Speculative for BTST and it should be independent of the frequency whether done two times in a month or 10 times… that will make things more clear for filing returns…
    Thank you…
8

Hi @S_Jain7,

Here are the answers to your queries.

  1. You can choose to report BTST transactions as capital gains or business income depending on the intent of trading and volume of transactions.
  2. It’ll be treated as non-speculative business income.
  3. The volume of transactions is generally used to determine whether you want to report the income as capital gains or business income. It’ll not make a difference in whether you should report such transactions under speculative or non speculative business. If you are reporting business income, it’ll be categorised as non-speculative as there is an intent of taking delivery.