ITR file for sharemarket gain/loss

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Deal Subedar
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ITR file for sharemarket gain/loss

Hi,

Last year i started equity swing trading and ended up with 50k short term loss.

Current year my shortterm gain is 100k.

I am a salaried employee and want to submit my ITR for last year.

Query
1. Which ITR should i submit.
2. If i want to rollover/adjust loss for next year does CA audit required.

You can find my pl in below url picture and suggest me accordingly.

https://freeimage.host/i/...57

33 Comments  |  
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i think u can carry forward ur losses till 8 yrs , but u have to pay ur taxes first !!

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theruler007 wrote:

i think u can carry forward ur losses till 8 yrs , but u have to pay ur taxes first !!

Yes i can carrydorward but my query is which ITR should i select or does it require ca audit.

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titamazon wrote:

Yes i can carrydorward but my query is which ITR should i select or does it require ca audit.

some rule is there luke…if profit is less than 8% of turnover then audit required….

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Ca audit not required but u will have to show it as capital gain and not as buisness income. If you were into intraday trading then u dont have option but show it as business income. And as far as setting off of previous loss is concerned it has to be from the same head i.e. capital loss

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I think u need to file itr2. Even to roll over the loss, the loss needs to be mentioned in itr2 while filing. You have option there.

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Off Topic – One of my relatives transferred Rs 70K (during the last FY 2019-20) directly in my bank account for a loan he took from me several years ago. Should I show this amount as income because we have to provide bank details as well in ITR-1 and details can be cross-checked anytime.
If I show this under “income from other sources”, can IT Dept question the Source of this in future?
My total income would not cross 2,50,000 even after including this as income.

Also, I had read that IT Dept had implemented new system of taxation/deduction from this year and tax-payers will have the option to choose whether they want to stay in the Old System or switch to New System. I can’t see this option anywhere in ITR-1. Doesn’t anyone know how to choose this?

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gargsahbbb wrote:

did you give him loan through bank account ??

I took a loan for my relative in 2007 from HDFC for 2 lac. The money was credited to my same HDFC account which I’ll show in ITR. I gave him in cash while I repaid thorough EMIs over 3 years from the same hdfc account. He paid back rest in cash to me.

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cocay wrote:

I took a loan for my relative in 2007 from HDFC for 2 lac. The money was credited to my same HDFC account which I’ll show in ITR. I gave him in cash while I repaid thorough EMIs over 3 years from the same hdfc account. He paid back rest in cash to me.

It is not certainly not an income as per the laws, but you structured your case in such a way that you cannot explain it to a ITO!
So it will be better if you take it in your income statement, and source will be your relative!
Now you may say, that it is a gift or any one time job you did for him!
The onus then shifts on your relative (i.e., if he has been filing ITR and has proof of earning that 70k and disclosing in ITR)
There are less chances of being pulled around and asked about 70k, and all you need is a good justification on account of both parties

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Awake wrote:

It is not certainly not an income as per the laws, but you structured your case in such a way that you cannot explain it to a ITO!
So it will be better if you take it in your income statement, and source will be your relative!
Now you may say, that it is a gift or any one time job you did for him!
The onus then shifts on your relative (i.e., if he has been filing ITR and has proof of earning that 70k and disclosing in ITR)
There are less chances of being pulled around and asked about 70k, and all you need is a good justification on account of both parties

If I don’t show this at all, and if in case they cross check and find it, would they really make it an issue knowing well that my total income wouldn’t exceed 2.5 lac even after including it? I mean it’s not even necessary to file ITR, if you don’t cross 2.5 lac an year as far as I know. I file out of habit every year.


I don’t have a problem showing this as income, the only concern is that if crosschecked and asked, the source or what service I provided, what would my answer be. Secondly, if I show this and be truthful about it and tell them that I wasn’t sure whether this would be considered as income or not, so I included this to be on the side of law.

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Firstly, F&O loss is a non-speculative loss and Intra-day stock trading is a speculative loss!
Speculative loss can only be adjusted against speculative income and unadjusted speculative losses can be carried forward to four years!
While for a non speculative loss, it can be carried forward for 8 years and can be set off against any head other than salary in that respective year, and while from next year only against non spec business!
So yes, you can claim it as a deduction! But for that you need to file ITR within due date in case of non spec business! And the correct form will be ITR 3
And yes in case of a loss from business you have to get it audited by a CA!

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cocay wrote:

If I don’t show this at all, and if in case they cross check and find it, would they really make it an issue knowing well that my total income wouldn’t exceed 2.5 lac even after including it? I mean it’s not even necessary to file ITR, if you don’t cross 2.5 lac an year as far as I know. I file out of habit every year.


I don’t have a problem showing this as income, the only concern is that if crosschecked and asked, the source or what service I provided, what would my answer be. Secondly, if I show this and be truthful about it and tell them that I wasn’t sure whether this would be considered as income or not, so I included this to be on the side of law.

Does your relative file ITR regularly, and will he able to justify 70k income (I mean his income in ITR> 2l atleast)?

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Awake wrote:

Does your relative file ITR regularly, and will he able to justify 70k income (I mean his income in ITR> 2l atleast)?

Not sure but almost certain he doesn’t file itr. Part of his income I think is already accounted for. He drives for ola/uber(accounted) in addition to booking privately (unaccounted). He also worked at a private firm for few months before lockdown drawing regular salary. So I think he can very well justify 70k.

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cocay wrote:

Not sure but almost certain he doesn’t file itr. Part of his income I think is already accounted for. He drives for ola/uber(accounted) in addition to booking privately (unaccounted). He also worked at a private firm for few months before lockdown drawing regular salary. So I think he can very well justify 70k.

Yeah so you account this in your itr! You can have any convincing story like u gave him 10k 3 4 times 10 15 years back when he was struggling, and now he repaid you back since he is doing fine!
Any story!
And tbh, there is very less chance of this driving attention imo, so you can chill! But its good to have a story in the back of your mind!!

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Awake wrote:

Yeah so you account this in your itr! You can have any convincing story like u gave him 10k 3 4 times 10 15 years back when he was struggling, and now he repaid you back since he is doing fine!
Any story!
And tbh, there is very less chance of this driving attention, so you can chill! But its good to have a story in the back of your mind!!

Perfect. Will account it.
Thanks for all your help

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Awake wrote:

Yeah so you account this in your itr! You can have any convincing story like u gave him 10k 3 4 times 10 15 years back when he was struggling, and now he repaid you back since he is doing fine!
Any story!
And tbh, there is very less chance of this driving attention imo, so you can chill! But its good to have a story in the back of your mind!!

Do you also know how to choose New or Old Income Tax regime while filling ITR? I can’t find any option in ITR-1

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cocay wrote:

Do you also know how to choose New or Old Income Tax regime while filling ITR? I can’t find any option in ITR-1

I haven’t filed any this year, so no!
You may check youtube!

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Awake wrote:

I haven’t filed any this year, so no!
You may check youtube!

Okay, just found that this isn’t applicable for FY 19-20

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Awake wrote:

It is not certainly not an income as per the laws, but you structured your case in such a way that you cannot explain it to a ITO!
So it will be better if you take it in your income statement, and source will be your relative!
Now you may say, that it is a gift or any one time job you did for him!
The onus then shifts on your relative (i.e., if he has been filing ITR and has proof of earning that 70k and disclosing in ITR)
There are less chances of being pulled around and asked about 70k, and all you need is a good justification on account of both parties

Is it necessarry to file ITR if income less than 2.5L or no income but transactions are there in bank/CC. For eg- students get money from parent or by doing part time job, so should they file ITR?
And ITD really select cases where ITR is not files but txns there in Bank/CC of amount <2.5L ?

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_One_Miller_ wrote:

Is it necessarry to file ITR if income less than 2.5L or no income but transactions are there in bank/CC. For eg- students get money from parent or by doing part time job, so should they file ITR?
And ITD really select cases where ITR is not files but txns there in Bank/CC of amount <2.5L ?

Short answer is You should file! It would hardly take 2 hours and can be done by yourself!
Its not necessary, but there is a slight chance! Look ITO pick cases with high credit transactions! Now what’s high is subjective and depends on ITO to ITO, other cases in his area/jurisdiction, targets etc!
Well it does help in visas, loan, and you maybe able to justify high value transactions!
Tell you what, during demonetization my principal CA was discussing a case with his partner that a married lady, had around 15-16L of cash in the house, which she earned through tuitions and all! And she never filed an itr
Now after deposting she got a notice!
Now it gets very subjective that how you justify your case and all, but it’s always better to be cautious beforehand

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Awake wrote:

Short answer is You should file! It would hardly take 2 hours and can be done by yourself!
Its not necessary, but there is a slight chance! Look ITO pick cases with high credit transactions! Now what’s high is subjective and depends on ITO to ITO, other cases in his area/jurisdiction, targets etc!
Well it does help in visas, loan, and you maybe able to justify high value transactions!
Tell you what, during demonetization my principal CA was discussing a case with his partner that a married lady, had around 15-16L of cash in the house, which she earned through tuitions and all! And she never filed an itr
Now after deposting she got a notice!
Now it gets very subjective that how you justify your case and all, but it’s always better to be cautious beforehand

15-16L is much more.
Students don’t spend even 2L in a year(which they get from parents or by part job).

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_One_Miller_ wrote:

15-16L is much more.
Students don’t spend even 2L in a year(which they get from parents or by part job).

It was earned over many years! And it was just an example! ITR gives you a cushion

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_One_Miller_ wrote:

Is it necessarry to file ITR if income less than 2.5L or no income but transactions are there in bank/CC. For eg- students get money from parent or by doing part time job, so should they file ITR?
And ITD really select cases where ITR is not files but txns there in Bank/CC of amount <2.5L ?

Yes they should file ITR. Just file ITR-1 & under gifts received exempted section file 2 lakh received from father as it will be 100% tax free. As long as your father is filing a proper ITR justifying a transfer of 2 lakh to his son(aka father ITR should not be less than 2 lakh) then this is no issue at all.

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Your amount is negligible. I assure you their is no way ITO is going to ask you anything. Just show it as income from other sources. Dont mark it as gift, since you can take gift from blood relation i.e only your family.

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Awake wrote:

Firstly, F&O loss is a non-speculative loss and Intra-day stock trading is a speculative loss!
Speculative loss can only be adjusted against speculative income and unadjusted speculative losses can be carried forward to four years!
While for a non speculative loss, it can be carried forward for 8 years and can be set off against any head other than salary in that respective year, and while from next year only against non spec business!
So yes, you can claim it as a deduction! But for that you need to file ITR within due date in case of non spec business! And the correct form will be ITR 3
And yes in case of a loss from business you have to get it audited by a CA!

Business income & speculative profit/loss is indeed shown in ITR-3 only but CA audit is not needed if Turnover is less than Rs.1 Cr & Total Income is less than the Basic Exemption Limit.
@cocay

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PshycoKiLLeR wrote:

Your amount is negligible. I assure you their is no way ITO is going to ask you anything. Just show it as income from other sources. Dont mark it as gift, since you can take gift from blood relation i.e only your family.

No need to even show it as income from other sources. If ITO is not going to ask then showing it as income is irrelevant & if they are going to ask then it doesn’t matter anyway whether you have shown it as income.

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