Hi there! 
Being a stock market trader is not easy. Think late nights analyzing trends, coffee-fueled mornings, and those split-second decisions that keep your heart racing.
And just when you think you’ve got it all figured out, there’s a tax on those hard-won profits, and the effort of reporting them in your ITR.
But there’s an upside to being in the business of trading. If you’ve made losses from intraday or F&O trading, you don’t necessarily have to absorb the loss entirely. Instead, you can set them off against your gains and bring down your tax liability. And if the losses are more than your gains, you can carry them forward to reduce your taxes in the coming years as well. Of course, there are clearly defined rules you need to follow.
That’s not all. There’s a whole list of business expenses you can claim and reduce your taxable income.
We’ve handpicked threads on these topics in today’s edition.
TOP THREADS
How are profits from stock market trading taxed?
There are multiple ways to earn from the stock market, and the tax treatment isn’t the same for all. For example, intraday and derivative trading are treated as business income and taxed at your slab rate. On the other hand, profits from delivery-based trades can either be considered capital gains or business income, depending on…Continue Reading
What expenses can I claim as a trader?
If you are a full-time trader, you can actually claim trading-related expenses as a deduction. And no, you don’t need to be a registered company or have a GST registration to do this. You are allowed to claim the rent and internet bills incurred for your trading business along with other expenses like…Continue Reading
Can I set off F&O losses against salary or other income?
Losses are part and parcel of trading in capital markets, and the ITD lets you adjust them against certain incomes to save on taxes. Since F&O is treated as non-speculative business income, these losses can be set off against most income heads in the same financial year except…Continue Reading
FAQs
What’s the ITR filing deadline for stock market traders?
For most traders filing ITR-3 or 4 (non-audit cases), the deadline is 31st August of the assessment year. If your accounts require a tax audit, the deadline is 31st October.
For how many years can I carry forward my trading losses?
F&O losses can be carried forward for 8 years and set off against any business income, while intraday losses can be carried forward for 4 years and adjusted only against other speculative income (future intraday profits).
Can I declare my capital gains as business income?
This totally depends on your intent. If trading is your primary occupation and you buy and sell shares frequently for profit, you should report your profits as business income. However, if you mainly depend on salary income and do trading on the side, it’s better to treat them as capital gains.
RESULTS FROM LAST DIGEST
What should your final tax liability be to file Form 121?
A) Less than ₹10,000 (11%)
B) Less than ₹5,000 (0%)
C) ₹0 (Nil) (78%) 
D) Below ₹50,000 (11%)
Well done! 78% of people chose the right answer.