How to Show Equity Profit and F&O Loss in IT Returns?

Ans: When you have profits from equity and losses in Futures & Options (F&O), both must be reported correctly in your Income Tax Return. Equity profits are treated as capital gains: if held for more than 1 year, they qualify as Long-Term Capital Gains (LTCG), taxed at 10% above ?1 lakh; if held for less than 1 year, they are Short-Term Capital Gains (STCG), taxed at 15%. F&O losses are treated as business income under "Income from Business and Profession" and can be set off against other business income or carried forward for 8 years to offset future non-speculative business income. Use ITR-2 or ITR-3 to file, depending on your income sources. If F&O turnover exceeds ?10 crores or profits are less than 6% of turnover, a tax audit under Section 44AB is required. Proper documentation, like trade summaries and broker reports, is essential. Consult a tax advisor to ensure compliance and optimize tax benefits.
Regards, Nitin Narkhede Founder Prosperity Lifestyle Hub, Free webinar https://bit.ly/PLH-Webinar