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How To Report Your Stock Market Income In ITR? An Income Tax Expert Explains
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ITR Filing 2025 has begun with 86,482 returns already filed using Excel Utilities. Online filing is yet to start. CA Suresh Surana explains how to report your stock market income.
Stock Market Income & ITR Filing 2025: The income tax return (ITR) filing season for the financial year 2024-25 (assessment year 2025-26) has begun, with the income tax department enabling Excel Utilities. A total of 86,482 returns have been filed so far using Excel Utilities, according to the official income tax data. Online ITR filing is yet to start. If you are a salaried individual, income tax experts advise you to wait for your Form 16 before filing the income tax return.
As stock market participation has increased in the past few years, many salaried individuals are wondering how to correctly report their share market income along with salary in ITR 2025.
Types of Stock Market Income & Tax Treatment
Different types of stock market transactions — such as delivery-based investments, intraday trades, and futures & options (F&O) — are treated differently under tax laws, which also impacts the choice of ITR form.
Delivery-based listed stock investments held for more than 12 months are treated as long-term capital gains (LTCG) and are taxed at 10% (enhanced to 12.5% w.e.f. July 23, 2024) on gains exceeding Rs 1.25 lakh under Section 112A of the Income Tax Act, 1961. If such stocks are sold within 12 months, they attract short-term capital gains (STCG) tax at a flat rate of 15% (enhanced to 20% w.e.f. July 23, 2024) under Section 111A.
Dividend income
Further, the treatment of income/losses with respect to listed shares would also depend on the purpose of holding, nature of business or investments, past treatment, and relevant circulars/notifications issued by the income-tax department.
Which ITR Form To Choose?
The selection of the appropriate income tax return (ITR) form is determined by the nature of income earned, including stock market transactions.
ITR-1: Simple salaried income can be filed under ITR-1. It is important to note that LTCG up to Rs 1.25 lakh from shares can also be filed in ITR-1 itself, as per the notified forms this year.
ITR-2: In cases where income arises solely from capital gains — whether short-term or long-term — on delivery-based equity investments, ITR-2 may be applicable. This also applies when such capital gains are accompanied by income from salary, house property, or other sources, provided there is no income classified as business or professional income.
ITR-3: For taxpayers engaged in trading activities such as futures and options (F&O) or intraday equity trades, the income is characterised as business income. Intraday equity trading income is considered speculative business income, whereas income from F&O is treated as non-speculative business income. In such cases, the correct form for filing is ITR-3, which is designed for taxpayers having income under the head 'Profits and Gains of Business or Profession'.
ITR-4: Where the turnover from such trading activities remains within the prescribed limits (typically up to Rs 2/3 crore, as the case may be), and the taxpayer opts for presumptive taxation under Section 44AD, ITR-4 (Sugam) may be used. This option is available only to resident individuals, HUFs, or firms (excluding LLPs), who do not maintain regular books of accounts and satisfy all other eligibility conditions under the presumptive taxation scheme.
It is important to note that ITR-4 is not applicable in cases where the taxpayer has income from capital gains (except LTCG up to Rs 1.25 lakh under Section 112A), where business turnover exceeds Rs 2/3 crore, or where the presumptive scheme is otherwise inapplicable.
• Capital Gains from Delivery-Based Trading
Income arising from delivery-based trading must be reported under the 'Capital Gains' schedule of the ITR. Details such as ISIN, name of the company, dates of acquisition and sale, cost of acquisition, sale consideration, and transaction-related expenses (e.g., brokerage) must be provided.
Long-term capital gains exceeding Rs 1.25 lakh are taxed at 10% (which was increased to 12.5% w.e.f. July 23, 2024), while short-term capital gains are taxed at 15% (enhanced to 20% w.e.f. July 23, 2024) under Section 111A. Many brokerage platforms offer downloadable, tax-compliant capital gains reports to facilitate accurate reporting.
• Intraday Trading as Speculative Income
Income from intraday trading is treated as speculative business income and must be reported under the 'Profits and Gains from Business or Profession' schedule. The gross turnover, defined as the aggregate of profits and losses from such trades, must be disclosed, along with a detailed profit and loss statement.
Allowable deductions include expenses such as internet charges, advisory fees, brokerage, etc. If the turnover exceeds Rs 1 crore (or Rs 10 crore in certain specified cases), or if the presumptive taxation scheme is not opted for and declared profits fall below the prescribed threshold, a tax audit under Section 44AB may be required.
• 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' schedule. A detailed profit and loss account must be prepared, with turnover computed as the total of absolute profits and losses.
Where turnover is below Rs 2/3 crore (as applicable), the presumptive taxation scheme under Section 44AD may be availed by declaring at least 6% or 8% of turnover as profit. In cases where presumptive taxation is not adopted and profits are low, tax audit requirements may arise.
• Dividend Income
Dividend income must be reported under the 'Income from Other Sources' schedule. The gross amount received should be disclosed and matched with the data reflected in Form 26AS and the Annual Information Statement (AIS)/Taxpayer Information Summary (TIS).
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A deduction of interest expenditure incurred for the purpose of earning such dividend income is allowed under Section 57, subject to a cap of 20% of the dividend amount.
The deadline to file income tax return is September 15, 2025, for non-audit ITRs. For those requiring audit, it is October 31, 2025.
About the Author
Mohammad Haris
Haris is Deputy News Editor (Business) at He writes on various issues related to markets, economy and companies. Having a decade of experience in financial journalism, Haris has been previously More
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tags :
income tax income tax return ITR filing stock market
Location :
New Delhi, India, India
First Published:
June 03, 2025, 11:16 IST
News business » tax How To Report Your Stock Market Income In ITR? An Income Tax Expert Explains
