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Scrip-wise reporting not needed for day trading, short term capital gains in ITR

The Income Tax Department on Saturday said that scrip-wise reporting is not required for day trading and short-term sale or purchase of listed shares for filing of income tax returns in assessment year 2020-21

twitter-logoBusinessToday.In | September 26, 2020 | Updated 21:44 IST
Scrip-wise reporting not needed for day trading, short term capital gains in ITR
The Finance Act, 2018 allowed exemption to the gains made on the listed shares up to January 31, 2018

The Income Tax Department on Saturday said that scrip-wise reporting is not required for day trading and short-term sale or purchase of listed shares for filing of income tax returns in assessment year 2020-21. "There is no requirement in the return of income for scrip wise reporting in case of short-term or business income arising from share transactions," the Central Board of Direct Taxes (CBDT) said in a statement.

The gain from share trading in case of stock traders or day traders is generally categorised as short-term capital gains because the holding period of shares in most cases is less than one year, a prerequisite for the gains to be categorised as long-term capital gains.

The Finance Act, 2018 allowed exemption to the gains made on the listed shares up to January 31, 2018 by introducing grandfathering mechanism for computation of long-term capital gains for these shares.

"The scrip wise details in the return of income for AY 2020-21 is required to be filled up only for the reporting of the long-term capital gains for these shares or units which are eligible for the benefit of grandfathering," CBDT said in a clarification.

"There was a report in certain section of media that stock traders/day traders are required to furnish scrip wise details in the return of income for AY 2020-21. The gain from share trading in case of stock traders or day traders is generally categorised as short-term capital gains or business income. This is because their holding period of shares/units in most of the cases is less than one year which is a prerequisite for the gains to be categorised as long-term capital gains. As there is no requirement in the return of income for scrip wise reporting in case of short-term/business income arising from share transactions, these reports are distorted and misleading," CBDT added.

Also read: ITR form: Govt extends deadlines for filing tax returns, other related compliances; check out details

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