Do F&O traders need to file ITR if profits are below basic exemption limit?

Income Tax ITR Filing
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1

Hi all,

I started trading in stocks and F&O last year. Overall I barely made anything, after adjusting everything, profits are below ₹3 lakh.

Do I still need to file an ITR in this case, or can I skip it since the income is small?

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Hi, if your total profits (after adjusting losses and expenses) are below the basic exemption limit of ₹3 lakh (₹2.5 lakh under the old regime), you’re not mandatorily required to file an ITR.

This is, of course, assuming you don’t have other sources of income. If you do, you’ll need to add everything up and check if your total income still stays under the limit.

That said, it’s still a smart idea to file your return. Here’s why.

  1. Your trades are already reported to the tax department anyway through brokers and exchanges, so it’s better to disclose them through ITR.
  2. Carry forward losses: Losses from F&O or intraday can only be carried forward and set off against future profits if you file your ITR before the due date.
  3. Claim refunds: If TDS or TCS has been deducted on your income or big-ticket spends, filing is the only way to get that money back as refund.

On top of that, filing taxes is a good habit, since it helps you keep track of your finances and understand them better. Plus, an ITR is often needed when applying for loans or visas.

So while you may not be legally required to file in your case, it’s usually wiser to file a return.

1 Like
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Thanks, this makes it a lot clearer.

4

F&O traders must file ITR if turnover exceeds audit limits, even if profits are below the basic exemption limit, to stay compliant and avoid tax scrutiny.

5

That said when F&0 trades and intraday trades are not found in AIS .Do brokers send these particulars separately or how does it work