The income tax return (ITR) filing season for the financial year 2024-25 (assessment year 2025-26) has started, with the income tax department allowing Excel Utilities
Janvi | Jun 3, 2025 |
Income from Stocks? Here is How to Report It in Your ITR
Stock Market Income & ITR Filing 2025: The income tax return (ITR) filing season for the financial year 2024-25 (assessment year 2025-26) has started, with the income tax department has released ITR Filing Excel Utilities. So far, 86,482 returns have been filed using Excel Utilities, according to official income tax data. Online ITR filing hasn’t begun yet. If you earn a salary, income tax experts suggest waiting for your Form 16 before filing your income tax return.
Since more people have started investing in the stock market in recent years, many salaried people are confused about how to correctly report their share market earnings along with their salary in the ITR 2025.
Let us understand how you can report your stock market income in ITR 2025:
Different types of stock market investments — like buying and holding shares, day trading, and futures & options (F&O) trading — are taxed differently under tax rules, which also affects which ITR form you should use.
Capital Gain
When you buy listed shares and hold them for more than 12 months before selling, any profit is called long-term capital gains (LTCG). This profit is taxed at 10% (increased to 12.5% from July 23, 2024) only if your total profit exceeds Rs 1.25 lakh under Section 112A of the Income Tax Act, 1961. If you sell these shares within 12 months, the profit is called short-term capital gains (STCG) and is taxed at a flat rate of 15% (increased to 20% from July 23, 2024) under Section 111A.
Intraday, Futures, and Options
Income from day trading (buying and selling shares on the same day) is considered speculative business income and is taxed according to your regular income tax slab rates.
Income from futures and options (F&O) trading, including index options and futures, is treated as non-speculative business income and is also taxed at your regular slab rates.
What about the Taxation of dividend income?
Dividend money you receive from Indian companies is taxed as ‘income from other sources’ at your regular slab rates and may have TDS (tax deducted at source) under Section 194 of the Income Tax Act.
Also, how your income or losses from listed shares are treated depends on why you’re holding them, the nature of your business or investments, how you’ve treated them before, and relevant guidelines issued by the income tax department.
The right income tax return (ITR) form depends on what type of income you earn, including from stock market transactions.
It’s important to note that ITR-4 cannot be used if you have income from capital gains (except long-term capital gains up to Rs 1.25 lakh under Section 112A), if your business turnover exceeds Rs 2/3 crore, or if the presumptive scheme doesn’t apply to you.
Capital Gains from Delivery-Based Trading
Income from buying and holding shares must be reported under the ‘Capital Gains’ section of the ITR. You need to provide details like ISIN (share identification number), company name, dates when you bought and sold, purchase cost, sale amount, and transaction expenses (like brokerage fees).
Long-term capital gains above Rs 1.25 lakh are taxed at 10% (increased to 12.5% from July 23, 2024), while short-term capital gains are taxed at 15% (increased to 20% from July 23, 2024) under Section 111A. Many brokerage platforms provide downloadable, tax-compliant capital gains reports to help you report accurately.
Intraday Trading as Speculative Income
Income from day trading is treated as speculative business income and must be reported under the ‘Profits and Gains from Business or Profession’ section. You must disclose the gross turnover, which is the total of all profits and losses from such trades, along with a detailed profit and loss statement.
You can deduct expenses like internet charges, advisory fees, brokerage, etc. If your turnover exceeds Rs 1 crore (or Rs 10 crore in certain specified cases), or if you don’t choose the presumptive taxation scheme and your declared profits are below the prescribed limit, you may need a tax audit under Section 44AB.
Futures and Options (F&O) Trading as Non-Speculative Business Income
Income from F&O trading is classified as non-speculative business income and must also be reported under the ‘Profits and Gains from Business or Profession’ section. You need to prepare a detailed profit and loss account, with turnover calculated as the total of absolute profits and losses.
If your turnover is below Rs 2/3 crore (as applicable), you can use the presumptive taxation scheme under Section 44AD by declaring at least 6% or 8% of turnover as profit. If you don’t adopt presumptive taxation and your profits are low, tax audit requirements may apply.
Dividend Income
Dividend income must be reported under the ‘Income from Other Sources’ section. You should disclose the gross amount received and match it with the data shown in Form 26AS and the Annual Information Statement (AIS)/Taxpayer Information Summary (TIS).
You can deduct interest expenses incurred for earning such dividend income under Section 57, but this deduction is limited to 20% of the dividend amount.
The deadline to file an income tax return is September 15, 2025, for returns that don’t require audit. For those requiring an audit, the deadline is October 31, 2025.
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