No requirement for scrip wise reporting in case of share trading – Clarification by CBDT

written by Income tax Expert | October 4, 2020

CBDT has vide Press release Dt. 26.09.2020 has clarified that one is not required to report script wise details in case of day trading or short term trades.

The clarification came after there was a report in certain section of media that stock traders/ day traders are
required to furnish scrip wise details in the return of income for AY 2020-21.

The gain from share trading in case of stock traders or day traders is generally categorised as short-term capital gains or business income.

It is pertinent to mention here that there is no requirement in the return of income for scrip wise reporting in case of short-term/ business income arising from share transactions, these reports are distorted and misleading.

The scrip wise details in the return of income for AY 2020-21 is required to be filled up only for the reporting of the long-term capital gains for these shares/units which are eligible for the benefit of grandfathering.

“The scrip wise details are not required in income tax return forms for AY 2020-21 for computation of capital gains/business income from shares/units which are not eligible for grandfathering.”

CBDT has mentioned that scrip wise details are not required for shares or units not eligible for grandfathering but shares or securities purchased after 31.01.18 and sold after 1 year are eligible under section 112A for 10% tax rate but to claim that one need to provide scrip wise details even though one is not claiming benefit of grandfathering.

Here, CBDT might be trying to tell that scrip wise reporting is not required for those who are not falling u/s 112A of the Income tax.

If scrip wise long-term gain is available, it can be cross verified by the Department electronically with stock exchange, brokerage companies, etc and there will be no need to subject these income tax returns to further audits or scrutiny.

Thus, in short except for shares, funds covered u/s 112A, one is not required to provide scrip wise details of shares or debentures anywhere in ITR .

You can read the full Press release HERE.

If you need any assistance in filing your ITR for share trading income CLICK HERE and select ITR 2 or 3 as per the requirement.