If you have suffered a loss in the stock market? So read this news before filing ITR


ITR Filing: Income from share market transactions can be taxed either under the head “Capital gains” or “Profits of business and profession”. It depends on whether the transaction is done as an investment or as a business activity. Whether this will be taxed as business income or capital gain will depend on various factors, such as the average holding period of the investment, source of money invested, transaction volume, intention behind making the investment, etc. This can only be decided on the basis of the facts of each case.

Intraday transaction in shares (where the transaction is paid without actual delivery) is treated as a speculative transaction and any loss on intraday transaction can only be adjusted against any other speculative transaction irrespective of whether Be it on commodities or shares. It cannot be adjusted against profit from your regular business activities.

intraday transaction
Any loss other than intraday transactions in shares can be set off against income from sources other than your salary income, if such transaction is treated as business and not investment.

If the transaction is treated as an investment, any loss arising out of such transaction can only be adjusted against capital gains and cannot be adjusted against any other source.

Hence any loss incurred by you from your share transactions under both “Capital gains” and “Profits of business or profession” cannot be set off against your salary income during the current year.

However, any loss under both the sources which cannot be set off during the year is allowed to be carried forward for set off against the income under the same source for the prescribed period.

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