Help needed regarding awareness in my specific ITR case

Income Tax
1

Hello everybody,

INTRODUCTION:
I am new to the forum. I tried to shed my ignorance on ITR filing by reading from websites on the internet. But I have a specific case and could not gather adequate information regarding my specific case. So I have come here to gather some basic knowledge about my specific case.

MY CASE:
Till now I had been a small trader & investor in stock market. I am in this since almost a decade. Now I felt I can handle the trade and I have entered in a big way (as per my standards :slightly_smiling_face:).

I do delivery based trading in listed company shares on BSE and NSE. I do around 2-4 trades in a month.

I have taken a loan up to Rs,80 lakhs to do delivery based trading on around 12% interest per anum, which comes up to Rs,10 lakhs per anum.

I did my first trade, with this large sum (as per my standards), by buying stocks on 24 July 2024 and selling them on 17 Dec 2024 and 31 Jan 2025. I have been incurring losses till now. Since April 2025 I have made some minor gains, if the interest incurred on loans is NOT taken into account. If interest is taken into account, I am still in loss.

I haven’t filed any ITR till now, except some long time, about 15 years ago, when the IT department demanded, as I was a small time trader. I was not tax eligible then. Seeing my ITR filing, the IT officer said, I need not file there after.

MY QUERIES REGARDING ITR FILING:

  • Did I miss filing my ITR considering that my first trade occurred on, i.e. I bought in July 2024 and sold on Dec 2024 & Jan 2025?

  • If I consider my gains/losses as STCG, can I deduct the interest on loans from the gains/losses and carry them forward to the next year?

  • If I consider my gains/losses as business income, can I deduct the interest on loans from the gains/losses and carry them forward to the next year?

  • If I consider my gains/losses as business income, and deduct the interest incurred as expenditure, do I have to register myself as a business firm and get TIN/GST number (Forgive me. I am not sure which one or both, I would have to. I need enlightenment on this too.)?

  • What is the rate of tax if I consider all my gains/losses as STCG?

  • What are the slab rates of tax if I consider my gains/losses as business income?

  • If I consider my trading gains as business income, do I have to maintain account books and furnish them before IT officials?

  • If I consider my trading gains as business income, do I have to get my accounts audited by a chartered accountant?

  • When do I have to file my ITR if I consider my income as STCG?

  • When do I have to file my ITR if I consider my income as business income?

It would be greatly helpful if information is shared regarding my queries. I would greatly appreciate any light thrown on these matters.

Thank you.

2

Hey @anilswipe

Let me address your queries one by one:

  1. ITR Filing : You are required to file an ITR if your income exceeds the basic exemption limit of ₹3,00,000 under the new tax regime. However, we recommend filing your ITR even if you have incurred losses, as this allows you to carry forward those losses.

  2. Interest on Loans: If your gains/losses are treated as Short-Term Capital Gains, interest on loans cannot be claimed as a deduction. However, if you declare the gains/losses as business income, the interest can be claimed as a business expense. Both capital losses (short-term or long-term) and business losses can be carried forward for up to 8 years.

  3. GST Registration: GST registration is not required for trading in securities.

  4. STCG Tax Rates: Short-term capital gains are taxed at 15% if the securities are sold before 23rd July 2024, and at 20% if sold on or after 23rd July 2024. The applicable slab rates will depend on the tax regime you choose.

  5. Books of Accounts and Audit: You are not required to maintain books of accounts. A tax audit is only mandatory if your turnover from business exceeds ₹10 crore.

  6. ITR Filing Due Date: If a tax audit is not applicable, the ITR must be filed by 31st July 2025 in both cases.

Hope this helps!

3

Great many thanks @Ayushi_Joshi, for all the explanation you have given regarding my queries. I am really grateful for your painstaking response.

I have gone through your explanations. I will read it some more times to digest it and come back if I have any doubts.

Thanks a lot again. :pray: