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Intraday trading and tax audit

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rahul

21 Points Posted on 24 December 2021

Hi,

For lack of better sense I ended up doing some intraday trades last year. It was a very small amount (turnover 15k) and I made a loss overall.

I'm reading mixed things online that I will need to declare this in ITR even if I make a loss and need to get audited. Is this true even for such a low turnover? I'm considering the below options -

1. File ITR1 and skip declaring this altogether given I don't want to carry forward the loss.

2. File ITR3, declare intraday turnover under presumptive business and pay tax on 6%.

I have many people tell me to go ahead with #1 given it's not a source of income and that it's a one time thing.

I'm wondering if #2 is more correct and safer way. Looking for confirmation.

In either case, I would want to avoid the hassles and costs of going through an audit. What would be the most appropriate thing to do in this case?

Replies (2)

Quick Summary

This discussion explores whether small intraday trading activities, even resulting in a loss, require declaration in an Income Tax Return (ITR) and potentially lead to a tax audit. The user is seeking advice on the best approach, considering filing ITR1 and omitting the trades or filing ITR3 and declaring them under presumptive business income. The consensus leans towards declaring trades for accuracy, though some acknowledge the common practice of not reporting minimal losses if not visible in AIS.