The investor's tax burden
Selling stocks or mutual funds triggers a tax event called capital gains (or loss), and it disqualifies you from the simple ITR-1.
Pick by how you trade
| Activity | Tax head | Form |
|---|---|---|
| Delivery buy/sell (held days plus) | Capital gains | ITR-2 |
| Intraday / F&O | Business income | ITR-3 |
For equity sold on or after 23 July 2024, STCG is 20% and LTCG above Rs 1.25 lakh a year is 12.5% without indexation (Source: Finance Act 2024).
Scenario 1: delivery trading (ITR-2)
Buy and hold, then sell, whether short-term (STCG) or long-term (LTCG). If this is your only market activity, file ITR-2.
Scenario 2: intraday and F&O (ITR-3)
Same-day trades or Futures and Options count as business income, so you file the more detailed ITR-3.
Do not ignore AIS (portal path)
- Log in at incometax.gov.in and open Services > Annual Information Statement (AIS).
- Find Sale of Securities and Units of Mutual Fund.
- If you see sales, file ITR-2 (or ITR-3), never ITR-1.
What you should do
Report even loss-making sales. Booking a capital loss lets you carry it forward to offset future gains.
Common mistake
Hiding share sales because "it was a loss". Unreported sales still create an AIS mismatch and a notice.
How LastMinute ITR helps
LastMinute ITR helps you organise broker capital gains statements (Zerodha, Groww, Upstox) for ITR-2/ITR-3. Start at /file, import at /file/import/documents, and reconcile at /file/import/mismatch.
LastMinute ITR is a companion tool, not affiliated with the Income Tax Department. You file and e-verify your return yourself on incometax.gov.in.