Role of Reporting Entities to Income Tax Department

Legal Compliances
1

What kind of account-specific information is shared or reported about my demat and trading account, and by whom is it shared or reported to the IT department?

And what information is shared by reporting entities such as brokers, depositories, exchanges, and SEBI?

2

Hi @TeamQuicko, can you please help us understand how and what information about trading and demat trades is reported to the Income Tax Department by each entity?

Would appreciate the response.

3

Hey @Learner1,

The reporting entities are required to report transactions like:

  • Sale, purchase, or exchange of goods, right, property, or interest in any property.
  • Works contract.
  • Providing services.
  • Any investment made or expenditure incurred.
  • Accepting any deposit or taking any loan.

Specific to trading, below is the list of transactions and their reporting entities.

Capital gains on transfer of listed securities or units of Mutual Funds: Recognised Stock Exchange,
Depository as defined in section 2(1)(e) of Depositories Act, 1996, Recognised Clearing Corporation,
Registrar to an issue and share transfer agent registered under section 12(1) of the SEBI Act, 1992.
Dividend income: The company issuing dividend.
Interest income: A banking company or a Co-op. Bank or post office.

Hope this clarifies!

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4

Thanks @Surbhi_Pal , I have a follow-up concern:

The first point is related to Equity gains based on the Demat account. What about the following:

  • Does trading profit i.e cash settled Index Options trading gets reported by anyone?
  • if so then, who reports trading profits to whom?
5

Kindly help answer my last two queries.

6

Can anyone? + @TeamQuicko

7

Hey @Learner1,

As of now, these profits are not reported by any entity.

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