How to tax on income/loss from speculation business

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This discussion clarifies how to report income and losses from speculative business activities, such as intraday trading, within your Income Tax Return (ITR). It explains that losses should be declared under the Profits and Gains from Business or Profession (PGBP) head. While Section 44AD is mentioned, it's noted that if you've incurred a loss, you cannot opt for its presumptive taxation scheme, as it requires declaring a profit. Instead, you should file using ITR 3 to declare the loss and potentially carry it forward to future tax years, ensuring you file before the deadline.

N SREEKANTH REDDY

N SREEKANTH REDDY (Querist)
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29 July 2022 How speculative business income/loss have to shown in ITR? One of my clients has intraday trading and he incurred 95149 loss from it, however his sell value is 10,09,33,732 and 10,10,13,984 is cost of acquisition . so what values should i consider in ITR? and they have given speculation turnover also, i.e., Rs.3,07,865/- I know it will be treated under INCOME FROM PGBP? However I don't know whether under 44ad or not? And what value should I consider and under which section I have to shown this loss?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 July 2022 The loss can be declared under PGBP head.
Your actual turnover is 3,07,865; which is sum of absolute values of gain or loss.
To declare it u/s. 44AD you must declare profit of 6% of TO.

N SREEKANTH REDDY

N SREEKANTH REDDY (Querist)
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29 July 2022 Thank you sir for giving an answer.
However my client has incurred a loss Rs.95,149/- and incurred charges to that 60000 and overall he incurred -1,55149/- loss. if i consider the turnover under 44AD, definitely I should show profit 6%, but he incurred loss.
sir could you please explain briefly about this?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 July 2022 You can file ITR 3 and declare the loss, which can be carry forward. But file it before 31st July.

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