INTRADAY

STEP 1: Determine your taxable income

The first step in filing income tax on intraday trading is to determine your taxable income. This include all sources of income including your intraday trading profits. Calculate your taxable income by subtracting your deductions and exemptions from your total income.

STEP 2: Determine your tax liability

Once you have calculated your taxable income you need to determine your tax liability. Use the current financial year income tax slab rates to calculate your tax liability.

STEP 3: Pay advance tax

If your tax liability for the year exceeds Rs. 10,000, you are required to pay advance tax in instalments throughout the year. The due dates for advance tax payments are:

• 15th June: 15% of the tax liability
• 15th September: 45% of the tax liability
• 15th December: 75% of the tax liability
• 15th March: 100% of the tax liability

Step 4: File your income tax return

Once you have paid the advance tax and determined your tax liability, you need to file your income tax return. The due date for filing income tax returns for intraday traders in India is July 31st of the assessment year. For example, the due date for filing income tax returns for the financial year 2022-23 is July 31st, 2023.

To file your income tax return, you can either do it online or offline. The easiest and most convenient way is to file it online through the Income Tax Department's e-filing portal. You will need to register on the portal, and then upload your income tax return form, which is available for download on the portal. Once you have uploaded your form, you can verify it electronically using your Aadhaar card or through net banking.

1. Claim deductions under Section 80C

Section 80C of the Income Tax Act allows taxpayers to claim deductions of up to Rs. 1.5 lakh on certain investments and expenses. Some investments that are eligible for deduction under Section 80C include Public Provident Fund (PPF), National Savings Certificate (NSC), Equity Linked Savings Scheme (ELSS), and tax-saving fixed deposits. By investing in these instruments, intraday traders can reduce their taxable income and save on tax.

2. Set off losses against gains

Intraday trading can result in both gains and losses. One way to save tax is to set off the losses against the gains. If a trader incurs losses in intraday trading, these losses can be set off against gains made in other intraday trades or even against gains made in other asset classes such as mutual funds or stocks held for the long term.

3. Keep accurate records

Maintaining accurate records of all intraday trading activities is crucial for tax-saving purposes. By keeping track of all transactions and expenses, traders can claim deductions on brokerage fees, STT (Securities Transaction Tax), and other transaction costs, thereby reducing their tax liability.

4. Opt for the lower tax rate under the Presumptive taxation scheme

The Presumptive taxation scheme is a simplified taxation method that is available to small businesses and professionals with a turnover of up to Rs. 2 crores. Under this scheme, traders can declare their income at a presumptive rate of 6% of turnover and pay taxes accordingly. This can help traders save tax as the tax rate under the presumptive taxation scheme is lower than the regular tax rate.

5. Seek professional advice

Intraday traders can benefit from seeking professional advice from a tax consultant or a financial advisor. These professionals can provide guidance on tax-saving strategies and help traders optimize their tax liabilities.