Reporting Intraday Gain & Loss in Income Tax Return

Many people face confusion between intraday gain & loss v/s capital gain. They tend to understand both as one & this leads to trouble in the form of penalties, notices from the incometax department.

This blog will help you understand the concept of intraday gain & loss, its tax-ability, applicable IT return form & much more.


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What is Intraday Trading?

When people purchase & sell stock on the same day then it is known as intraday trading. The investors aim to make profit on the volatility of stock price on a same day. Therefore, it is imperative to disclose any intraday gain & loss while filing income tax return (ITR filing).

Intraday gain & loss is different from capital gain. In case of capital gains, the stock is kept in hand for at least 1 day before it is sold. While in case of intraday trading, the stock is bought & sold by the investor on the same day.

How to do Intraday Trading?

You can do intraday trading using Demat account. While buying stock, one needs to declare his/her intention of intraday trading. Also, intraday gain & loss is also called as speculation gain & loss.

Intraday gain & loss is taxable under which head?

The objective behind intraday trading is to make short term gains based on a share price. Hence, instead of charging intraday gain & loss under capital gains, it is taxed under business & profession.

Long term capital gains are taxed at concessional rates & some capital gains from equity/ mutual funds are exempt u/s 10(38). But intraday gain & loss is taxed at normal slab rates (as applicable to an individual).

Intraday gain & loss ITR form

Knowing correct ITR form before incometaxefiling return is very important. In case of intraday gain & loss, if you earn income form salary then ITR 3 is applicable. But it is important to note that, applicability of ITR forms in case of intraday trading varies as per circumstances. Such situations can be number of transactions entered, amount of turnover, frequency of trading etc.
As per income tax provisions, any loss on intraday trading can be set-off only with intraday (speculative) gains. Excess loss can be carried forward for 4 AY only & carry forward is only possible if ITR is filed on time.

Also, while calculating intraday gain & loss you can claim deduction of Securities Transaction Tax (STT) paid. And expense which is directly related to intraday trading can also be claimed.


If you want to avoid penalties then it is important to be aware of all the procedure etc before filing ITR. Any wrongdoing in filing ITR can bring notice, penalty etc from the income tax department.
You can also file income tax return for FREE through Tax2win. And it is recommended to file tax return before 31st August otherwise youll have to pay late filing fee u/s 234F of up to ?5,000.
Now check your income tax refund status using our Online Refund Status tool which provide real time information.
Be aware & be a responsible citizen. Happy Filing 🙂

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