My broker shows ₹50,000 LTCG. Do I need to pay any tax?

No. LTCG from equity up to ₹1.25 lakh per year is completely exempt under Section 112A. You still need to report it in Schedule CG of ITR-2, but no tax is payable.

What if I traded intraday in stocks — is that capital gains or business income?

Intraday stock trading (buying and selling within the same day without taking delivery) is classified as 'speculative business income' — not capital gains. It requires ITR-3. Intraday losses can only be set off against speculative profits, not other income.

I received dividends from stocks — where do I report them?

Dividends are reported under 'Income from Other Sources' in ITR-2. They are taxed at your income slab rate. TDS of 10% is deducted by the company if dividends exceed ₹5,000 per year — this appears in your Form 26AS and is creditable against your tax liability.

How to File ITR for Stock Market Income — Capital Gains Tax Guide India

Which ITR Form for Stock Market Income?

The correct ITR form depends on the type of stock market income you have:

ITR-2: For salaried individuals with capital gains from stocks, equity mutual funds, debt funds, or any investment. This is the form for most retail investors.
ITR-3: Required if you have F&O (Futures & Options) income, intraday trading income, or any other business income from the market. F&O is classified as "non-speculative business income" by the Income Tax Act.
ITR-1 (Sahaj): Cannot be used if you have any capital gains from stocks. Do not use ITR-1 if you sold stocks or mutual funds during the year.

Short-Term vs Long-Term Capital Gains

The holding period determines whether your gain is STCG or LTCG:

Equity shares and equity mutual funds: Held ≤1 year = STCG (20% tax); Held >1 year = LTCG (12.5% above ₹1.25 lakh exemption per year)
Debt mutual funds (post-April 2023): Always taxed at income slab rate regardless of holding period — no LTCG benefit
Unlisted shares: STCG if held ≤2 years; LTCG at 12.5% if held >2 years
Dividends: Always taxed at income slab rate, regardless of holding period — reported under "Income from Other Sources"

Schedule CG in ITR-2 — Step by Step

In ITR-2, all capital gains are reported in Schedule CG (Capital Gains):

Part A — Short-term capital gains: Enter total STCG from equity (20%), STCG from debt, STCG from property separately
Part B — Long-term capital gains: Section 112A for equity LTCG; enter total sale proceeds, cost of acquisition (original purchase price), and net LTCG
Section 112A exemption: First ₹1.25 lakh of equity LTCG is exempt. Only the amount above ₹1.25L is taxed at 12.5%. This ₹1.25L limit resets every financial year.
Grandfathering clause: For shares purchased before January 31, 2018, the cost of acquisition is deemed to be the higher of the actual purchase price or the market price on January 31, 2018. Your broker's capital gains statement will calculate this for you.

Getting Your Capital Gains Statement

Before filing, collect these documents:

Broker capital gains statement: Log into Zerodha Console, Groww, or your broker's platform → Tax P&L → Download for the financial year. This gives STCG, LTCG, and dividend income broken by scrip.
Mutual fund capital gains statement: Log into MF Central (mfcentral.com) with your PAN → download combined capital gains statement across all AMCs
Form 26AS: Download from income tax portal (incometax.gov.in) → Annual Information Statement. Shows all TDS deducted on dividends, proceeds from securities transactions.
AIS (Annual Information Statement): More detailed than 26AS — shows individual transactions reported by brokers and AMCs to the IT department. Your ITR must match AIS figures exactly or you will get a notice.

F&O Income — ITR-3 and Business Treatment

F&O trading is treated as a business, not capital gains. This means:

Profits are added to your income and taxed at slab rate
Losses can be set off against other business income (not salary)
F&O losses can be carried forward for 8 years and set off against future F&O profits
Business expenses (internet, brokerage, advisory fees) can be deducted
If F&O turnover exceeds ₹10 crore, a tax audit is mandatory; below ₹10 crore, if profit is less than 6% of turnover, audit is required
F&O turnover = absolute sum of all profits + absolute sum of all losses (not just net P&L)

AIS/TIS Reconciliation — Critical Step

The Income Tax Department receives transaction data directly from NSE/BSE, depositories (CDSL/NSDL), and AMCs. This data appears in your AIS (Annual Information Statement). Before filing:

Download your AIS from the IT portal
Cross-check every line with your broker's capital gains statement
If you see discrepancies (wrong amounts, transactions not yours), submit feedback on the AIS portal to flag them
File only after AIS and your records match — mismatches invite automated scrutiny notices

Key Deadlines and Penalties

July 31: Due date for individual ITR without audit
October 31: For cases requiring tax audit (F&O traders above threshold)
Late filing after July 31 but before December 31: ₹5,000 penalty (₹1,000 if income below ₹5 lakh)
Advance tax: If your tax liability exceeds ₹10,000 in a year, you must pay advance tax in installments (June 15, September 15, December 15, March 15) to avoid interest under Section 234B/234C

Frequently Asked Questions

Yes. Short-term capital losses can be set off against both STCG and LTCG. Long-term capital losses can only be set off against LTCG, not STCG. Unabsorbed capital losses can be carried forward for 8 years, but only if you file your ITR on time.