Some senior citizens may also want to dabble in the stock market and take calculated risks if they have surplus money. So, if you have just started as an investor and do intraday trading, you may want to know how to keep track of your investment and trade details for tax purposes. Buying and selling stocks on the same day is called intraday trading and is done to book profit on the same day. Even if you don’t frequently do intraday trading, sometimes, you may want to take risks and sell your existing holdings to get some new ones in the portfolio. As a result, you end up with short-term capital gains or losses.

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How To Find Details & Pay Taxes for Short-Term & Intraday Trades?

To track investments for tax purposes, it is advisable to maintain comprehensive records of all trades and investments, including purchase and sale dates, amounts, expenses and prices. Expenses include brokerage fees, commissions, and other transaction costs.But even if you don’t record them at the end of each financial year, your brokerage firm will send you an annual tax statement. Alternatively, you can also find a P&L statement in the report section of your broker application, which can be downloaded. This document lists all your stock trades for the year with total capital gains or losses. This can be used when filing your income tax return.

When you file an income tax return, note that if you engage in intraday trading, you must file ITR-3, as intraday gains are treated as business income. Traders must report this income as business income and file taxes accordingly because it is classified as speculative income for tax purposes in India. As a trader, you must file returns under the head “Profits and gains from business or profession”. Individuals’ profits in intraday trades are taxed based on their income level, with rates reaching up to 30 per cent. However, losses can be carried forward up to 4 years to offset intraday profits, but only in the old tax regime.

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Similarly, expenses and short-term capital losses can be set off against short-term capital gains, long-term capital gains or salary income to reduce your tax liability. In this case, it is available in both tax regimes.