InvestorQ : Can you throw some light on how gains on intraday trading and F&O are treated under the IT Act?
Anjana Aiyar made post

Can you throw some light on how gains on intraday trading and F&O are treated under the IT Act?

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Arya Nanda answered.
2 years ago
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The most important rule to remember is that you cannot set off losses on intraday trading against short term gains on shares. If you have incurred speculative loses by doing Intra-day trading in Stocks, they can only be set off through speculative income and can be carried forward up to four years only. Intraday trading is considered to be speculative because there is no intention to take delivery of an asset. Since capital gains are only based on assets that you own, intraday trading is not included in capital gains.

Now let us turn to profits and losses on futures and options trades. How are profits and losses on futures and options treated for tax purposes? This is a standard confusion that many traders have. Intra-day trading has been defined as ‘Speculative business’ whereas F&O trading is not. Income from trading in F&O (both intraday and overnight) on all the Stock Exchanges can be considered as non-speculative business income. The reason is that the F&O product is designed to be cash settled and the intention of buying a future or an option is deemed to be to take delivery of the underlying.
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Dinesh C Nagpal answered.
10 months ago
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Both are taxable under business income.

Shares bought in cash segment are held for more than 1 day at least are considered to be under the category INCOME from SECURITIES which comes under Standard Deductions and individual tax slabs

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