Hi, would like to know if it is necessary to show the share trading income as business income and preparing balance sheet and P&L while filing returns from A.Y 15-16 My dad is a senior citizen and his income is mainly from interests on Fixed Deposits He also does trading in shares to a small extent and has income from short term and day trading Regards
There are no definite guide lines to determine whether income from trading in shares is business income or otherwise. It is the matter of judgement whether it is done as a business or investment.
Day trade in shares will result in income from speculative business.
F & O profit need to be shown under the head Income from Business. In case of delivery based trading you can share the same under Short Term Capital Gain and Long Term Capital Gain.
In case of Business Income you need to prepare P & L and B/s. and file the same at the time of filing.
In case of intraday sales of shares the profit /loss will be treated as Speculation profit/loss.
