# Intraday Trading Tax

> Profits from intraday equity trading — buying and selling the same share on the same day without delivery — are speculative business income under Section 43(5), taxed at slab rates in ITR-3. Speculative losses can be set off only against speculative income and carried forward for four years. Delivery trades held longer are capital gains, and F&O is non-speculative business income, so a trader may have three different heads in one return.

Practice: Trader & Investor Tax — https://www.industax.com/services/investor-tax/

Brokers' P&L reports split intraday, delivery and F&O trades, but the classification in your return must follow the law, not the report's labels. We reconcile them and keep the heads separate so losses are used correctly.

Intraday turnover counts toward tax audit thresholds along with F&O and other business turnover, computed on absolute profit and loss.

## Key facts

| Item | Detail |
| --- | --- |
| Head | Speculative business income |
| Rate | Slab rates |
| Loss set-off | Only against speculative income |
| Carry-forward | 4 years |
| Form | ITR-3 |

## Who needs this

- Intraday equity traders
- Traders mixing intraday, delivery and F&O
- Traders with speculative losses

## What's included

- Head-wise classification
- Turnover computation
- Loss tracking
- ITR-3 filing

## Documents

- Broker tax P&L
- Contract notes
- Bank statements

## Process

1. **Classify** — Trades split by head.
2. **Compute** — Income, turnover and losses computed.
3. **File** — ITR-3 filed on time.

## FAQs

### Can intraday losses be set off against F&O profits?

No. Speculative losses (intraday equity) can be set off only against speculative income. F&O income is non-speculative, so it can't absorb intraday losses.

### Is intraday income taxed at 20% like STCG?

No. The 20% rate applies to short-term gains on delivery trades. Intraday profit is business income taxed at your slab rate.

### Can I claim expenses against intraday income?

Yes, expenses incurred wholly for the trading activity — brokerage, internet, software and similar — can be claimed against business income.

## Official sources

- Income Tax e-Filing portal: https://www.incometax.gov.in/

---
Canonical page: https://www.industax.com/services/investor-tax/intraday-trading-tax
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.