Income Tax Filing for Traders & Investors

Yes, you are required to show your income or losses from your trading on your income tax return. You need to show the profit or loss from trading in the profit and loss account in ITR-3 or ITR-4. The benefit of showing the loss from trading is that you can set it off from other incomes (except salary) and save tax. You can also carry forward the excess loss to the next assessment year and set it off against the business income of that assessment year.

If you do delivery-based trading, then the total of sales values is your turnover. In case of non-delivery-based trading, the total of positive and negative transactions is considered to be the turnover. If you are trading in options, then the turnover will be the total of positive and negative transactions, converted into a positive figure, including the premium received on the sale of options.

You can opt for presumptive taxation under Section 44AD only if your trading income is treated as business income and your turnover does not exceed Rs. 3 crore. So, if your trading is non-speculative business income and meets the turnover criteria, you can opt for presumptive taxation under 44AD.

Like salaried persons, traders opting for presumptive tax will now need to file their income tax returns by 15th September, 2025. If a tax audit applies to them, then the last date to file ITR as well as the tax audit report is September 30, 2025, and the due date to file ITR is 31st October 2025.

No, presumptive taxation is available for Indian residents only. NRI cannot opt for it.

Traders eligible under presumptive tax are not required to maintain any books of account. However, they are mandated to keep books of account if the income disclosed is less than 6% of gross receipts and the total income exceeds Rs. 250,000, OR the turnover exceeds Rs. 3 crores. In this case, professionals will also be required to conduct their audit.

If the trading is not intraday, then it is non-speculative business, and the loss of speculative business can be set off against both non-speculative and speculative business profits. If it is intraday trading, then it is a speculative business, and the loss from such business can be set off against speculative business profit only. Loss from Non-speculative business can be set off against any income except salary.