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Itr

HARI KRISHNA VOOTUKURI (Manager) (42 Points)

05 December 2014

I have income from salary and I am trading in F&O and cash segment in stock market. Which ITR I have to use to file my tax return?

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Hemanth Pullanikkat (Chartered Accountant) (89 Points)
Replied 05 December 2014

ITR- 1 can be used by an individual who have income from salary but not having income from business or profession.It can be also used by persons who have income from salary and also from exempted capital gains, includes long term capital gain from share trading. ITR-4 can be used by an individual who have income from salary and also income from proprietary business or profession. In this case you have income from salary and also from trading.Whether income from trading will come under 'capital gains' or 'income from business or profession' is based on your intention when carrying out trading and also based on frequency of trading. Income from trading in Forward and Options and also in cash segment will come under 'income from capital gains' if your intention is investment and not profit motive in speculation.If your intention is profit motive from trading and not investment it will be treated as income under head 'income from business or profession' So you are the ultimate authority to decide whether your intention is making profit from speculation or investment. If your intention is investment and income is from long term capital gain you can file return using ITR-1.If you received income from short term capital gain you have to use ITR-2. If your intention is making profit from frequent tradings the income will come under 'income from business or profession'. So you have file your income tax return using ITR-4.

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