If one does intraday trading in shares- the profit made is directly taxed as per his income slab. If he makes a loss- how is it treated in income tax? Also, is there any other implications like turnover tax or audit by CA on the total trade value involved at the time of filing IT returns?

Ans: ITR 3 is applicable in case of trader of shares. Gain from shares will be taxed after deducting expenses incurred exclusive for trading in shares. In case books of accounts are required to be prepared as per Sec 44AA, you have to fill Balance sheet and P&L in ITR 3

Ans: You have raised the point whether your past losses in F&O and Intraday trading can be used to save tax now? There are some points to note here:-

1. F&O is classified as a non-speculative business while Intraday Trading is classified as speculative business.
2. Both speculative and non-speculative business incomes are added to your overall income including salary, other business income, interest on deposits, income from rentals, etc and taxed according to the applicable tax for you.
3. Losses arising from speculative transactions are called speculative losses. These losses can be carried forward for a period of up to four consecutive financial years. Also, they can be set-off only against speculative business income made during that period.
4. On the other hand, losses arising from non-speculative transactions (non-speculative losses) can be carried forward for a period of up to eight consecutive financial years. You can set-off non-speculative losses against any other business income except salary in the same year.
5. Usually, trading in futures & options must be reported as a business unless you have only a few trades (say if only 2-3 trades) in the financial year. Remember this also applies to individuals. You don’t have to be formally incorporated as a company or some legal entity to earn business income. Individuals can have business income too.

From your statement it seems that you have not reported your past losses. If you have not done so, then you would not be able to set them off in the manner given above. However, if you have any such losses in the last financial year whose Income Tax Return (ITR) is yet to be filed, you can use the set-off rules as given above.

For more clarity, do discuss it in more details with your tax filing person.

Ans: Here's a breakdown of your tax situation and some advice:

Tax on Share Trading Profits (STCG):

You're correct. Since you plan to sell the shares within 5-6 months (short-term), the profits will be considered Short-Term Capital Gains (STCG).
STCG on equity shares is taxed at a flat rate of 15% in the old tax regime.
Paying STCG Tax:

You don't need to pay STCG tax directly while filing your Demat account.
However, you are responsible for reporting the STCG income and paying the tax when you file your Income Tax Return (ITR) for the relevant financial year.
ITR Filing:

While filing your ITR, you'll need to declare the sale of shares, the profits earned (STCG), and the tax liability (15%).
The ITR itself doesn't involve direct tax payment. You might need to pay any tax due through challan or other methods specified by the Income Tax department.
Profit Booking vs. Long-Term Investment:

Here's a consideration for your strategy:

Tax Benefit of Long-Term Capital Gains (LTCG): If you hold the shares for more than 1 year, any profits become Long-Term Capital Gains (LTCG). LTCG exceeding Rs. 1 lakh attracts a 10% tax with indexation benefit (reducing impact of inflation). This can be a tax advantage compared to the flat 15% on STCG.
Market Volatility: Short-term trading involves higher risk due to market volatility. Consider your risk tolerance and investment goals.
Recommendation:

It might be beneficial to hold the shares for the long term to potentially benefit from LTCG tax advantages and potentially higher returns over time. However, the decision depends on your individual circumstances, risk tolerance, and investment goals.
Additional Tips:

Consult a qualified tax advisor for personalized advice on your specific tax situation, considering your income sources, deductions, and tax regime.
Research and understand the risks involved in share trading before investing.

I hope this clarifies your queries!

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in