🧾 Introduction
Equity trading has become a popular source of income in India, but many traders struggle with correct income tax return (ITR) filing. Whether you trade intraday, futures & options (F&O), or delivery-based equity, tax treatment and compliance rules differ.
This Saving Mantra guide explains the step-by-step process to file Income Tax Return for Equity Traders, covering applicable ITR forms, audit applicability, expense claims, and common mistakes to avoid.
📊 Types of Equity Trading & Tax Treatment
Before filing your return, identify your trading type:
1️⃣ Intraday Equity Trading
- Classified as Speculative Business Income
- Profit taxed as per slab rates
- Loss can be carried forward for 4 years
2️⃣ Futures & Options (F&O) Trading
- Classified as Non-Speculative Business Income
- Taxed as per slab rates
- Loss can be carried forward for 8 years
3️⃣ Delivery-Based Equity Trading
- Treated as Capital Gains
- Short-Term Capital Gain (STCG): 15% tax
- Long-Term Capital Gain (LTCG): 10% above ₹1 lakh
📝 Step-by-Step Process to File Equity Trader ITR
Step 1: Collect Required Documents
Keep the following ready:
- PAN Card
- Aadhaar Card
- Bank Statements
- Trading P&L statement from broker
- Capital gains statement
- Demat account statement
- Previous year ITR (if any)
Step 2: Prepare Trading Profit & Loss Account
Calculate:
- Turnover (absolute profit method for F&O)
- Net profit or loss
- Brokerage, STT, exchange charges
- Internet, laptop, advisory fees, office expenses
💡 Tip: Equity traders are allowed to deduct genuine business expenses.
Step 3: Check Tax Audit Applicability
Tax audit is applicable if:
- Turnover exceeds ₹10 crore (₹2 crore in some cases), or
- Profit is less than 6% (digital) and income exceeds basic exemption
If audit applies, Form 3CA / 3CB & 3CD must be filed.
Step 4: Choose Correct ITR Form
| Trading Type | Applicable ITR |
|---|---|
| Intraday / F&O | ITR-3 |
| Capital Gains only | ITR-2 |
Step 5: Fill ITR on Income Tax Portal
- Log in to Income Tax e-Filing Portal
- Select Assessment Year
- Choose applicable ITR form
- Enter:
- Business income
- Capital gains
- Other income
- Deductions under Chapter VI-A
Step 6: Claim Eligible Deductions
Equity traders can claim:
- Section 80C (LIC, ELSS, PPF, etc.)
- Section 80D (Health Insurance)
- Section 80G (Donations)
Step 7: Verify & Submit ITR
- Cross-check tax payable or refund
- Submit return
- Complete e-Verification via Aadhaar OTP / Net Banking
⚠️ Unverified returns are treated as invalid.
❌ Common Mistakes Equity Traders Should Avoid
- Filing ITR-1 instead of ITR-3
- Ignoring tax audit requirements
- Not reporting losses
- Incorrect turnover calculation
- Missing expense deductions
✅ Why Choose Saving Mantra for Equity Trader ITR?
- Expert handling of F&O & intraday cases
- Accurate turnover & audit assessment
- End-to-end compliance support
- Loss carry-forward optimization
- Dedicated CA & tax advisors
📞 Need Help Filing Equity Trader ITR?
Saving Mantra helps equity traders stay 100% tax-compliant while maximizing deductions and minimizing risk of notices.
👉 Connect with Saving Mantra today for hassle-free ITR filing.
⚠️ Disclaimer
This article is for informational purposes only and does not constitute legal or tax advice. Income tax laws are subject to change. Please consult a qualified tax professional or CA before filing your income tax return.