Equity trading as Business Income

[Amar Gandhi]

I was earlier filing share trading activities as STCG or LTCG as applicable. But since last two years I am doing share trading as full time activity and have frequent transactions (Intraday/FnO/cash positional/long term). As per my knowledge. I have to show FnO trading as Business income. But Can I show my cash trading activities as Business income and not as STCG/LTCG? I have read somewhere that if I shown cash segment trading as STCG/LTCG earlier, I cannot change it to Business income. Please guide

AI Summary

Changing from Capital Gains to Business Income for Frequent Stock and F&O Trading: When Cash Trades Qualify, Reporting Steps A taxpayer reports switching from treating share transactions as capital gains to conducting frequent, full-time trading including F&O and asks whether cash-segment trades can now be classified as business income and whether prior STCG/LTCG reporting precludes the change. Classification depends on facts: frequency, volume, intention, level of organization and reliance on trading for income; courts and tax authorities recharacterize if facts support business activity. Changing treatment is possible but requires consistent records, justification, disclosure (or revised returns) and may attract scrutiny or adjustments by tax authorities. A respondent inquired about assistance filing returns under the new approach.