ITR for Share Market Income

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ITR filing for Share Market Income

For AY 2025-26

₹ 1499/-
  • Computation
  • ITR acknowledgment
  • Filed ITR form
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Filing ITR for Share Market Income: For AY 2025‑26

If you earned income from trading or investing in the stock market during Financial Year 2024‑25 (Assessment Year 2025‑26), here’s your plain‑English guide to filing your ITR for share market income, including what’s new for AY 2025‑26 and how to report gains and losses correctly.

Why filing ITR for share market income matters?

Even if your capital gains are tax‑exempt, it’s still important to file your tax return with details of your share market income. That includes:

  • Reporting capital gains (long‑term and short‑term)
  • Reporting dividend income, including from share buybacks
  • Declaring any capital losses, which can be carried forward up to 8 years and offset future gains

Filing accurately helps avoid notices, supports tax planning, and keeps compliance smooth.

itr for share market income

Income Tax Return Filing Fees

For AY 2025-26

₹ 1499/-
  • Computation
  • ITR acknowledgment
  • Filed ITR form
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Documents Required for Income Tax Return Filing

  1. Rent paid – if any
  2. Home loan interest certificate if any
  3. School fee – if any
  4. Lic policy receipt if any
  5. Health insurance receipt if any
  6. Medical expenses – if any
  7. Salary Slip for last financial year
  8. Form 16 – if have
  9. User id and password of income tax portal – if remembered

ITR Filing Due Date for AY 2025-26

For Assessment Year (AY) 2025-26, which corresponds to the Financial Year (FY) 2024-25, the due date for filing ITR 2 for individuals whose accounts are not required to be audited has been extended to September 15, 2025.

Initially, the due date was July 31, 2025, but the Central Board of Direct Taxes (CBDT) extended it due to extensive changes in the ITR forms and the time needed for system readiness and rollout of utilities.

Key changes in ITR filing for AY 2025‑26

A. New tax slabs and capital gains rates

  • For share or mutual fund sales on or after July 23, 2024, short‑term capital gains (STCG) are now taxed at 20% (vs 15% earlier).
  • Long‑term capital gains (LTCG) are now taxed at 12.5%, without the benefit of indexation .

Transactions before July 23, 2024 remain under the old regime (STCG at 15%, LTCG at 10% without indexation, indexed as applicable) .

That means your ITR form asks you to split capital gains into two parts: before and after that key date .

B. Share‑buyback proceeds now treated as deemed dividends

From October 1, 2024, proceeds you receive from a share buyback by a listed domestic company must be reported as dividend income under Income from Other Sources. For capital gains, the sale consideration is treated as zero, creating a capital loss equal to your acquisition cost; you can then carry this loss forward if properly disclosed .

C. New tax filing forms & updated utilities

  • ITR‑2, ITR‑3, ITR‑5, etc., now include separate sections to record capital gains before/after July 23, 2024.
  • ITR‑3 is needed if your income includes business/ professional income or trading in F&O. This form now also captures buyback losses, TDS section codes, and business profession codes like F&O traders (code 21010) .
  • ITR‑1 (Sahaj) and ITR‑4 (Sugam) eligibility has expanded: now if your LTCG from listed equities or equity mutual funds is up to ₹1.25 lakh in FY 2024‑25 and you have no brought‑forward capital loss, you may file using these simpler forms .

D. Other important updates

  • Form 10‑IEA acknowledgment: if you opt out of the new tax regime for AY 2025‑26 (i.e. continue old regime), you must provide acknowledgement. This applies especially for ITR‑4 and ITR‑2 users .
  • Mandatory Detailed deduction reporting: claiming HRA, 80C‑80U deductions requires declaring documents or policy numbers .
  • TDS Section code disclosure is mandatory in Schedule‑TDS for all ITR forms including those detailing share market income .
  • Asset‑Liability Schedule: only required if your total income exceeds ₹1 crore (raised from ₹50 lakh previously) .

Choosing the right ITR form if you have share market income

ScenarioRecommended ITR form
LTCG ≤ ₹1.25 lakh from shares/mutual funds; no carry‑forward loss; salaried or simple profileITR‑1
Same as above, but small business or professional under presumptive scheme (44AD/44ADA)ITR‑4 (Sugam)
Any capital gains beyond ₹1.25 lakh, capital losses carried forward, or short‑term gains; dividend income; buybacksITR‑2
Business income (e.g. F&O trading), capital gains, buybacks, profession codes, asset scheduleITR‑3
Partnership firms, LLPs, etc. with capital gainsITR‑5

Income Tax Return Filing for AY 2025-26

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Frequently Asked Questions (FAQ)

1. Who needs to file ITR for share market income in AY 2025–26?

Anyone who has earned income from shares or equity mutual funds during FY 2024–25 (April 1, 2024 – March 31, 2025) must file ITR, especially if:

  • You made capital gains (short or long term)
  • You received dividends
  • You had losses you want to carry forward
  • You traded in F&O, intraday, or derivatives

Even if your capital gains are tax-free, reporting is still necessary for compliance and loss carry-forward.

2. What ITR form should I use for share market income?

Type of IncomeRecommended ITR Form
LTCG ≤ ₹1.25 lakh & no lossITR-1 or ITR-4
Capital gains (LTCG/STCG) > ₹1.25 lakh or carry-forward lossesITR-2
Share trading income (F&O/intraday) or business incomeITR-3
LLPs, partnerships with share incomeITR-5

3. Are capital gains from shares taxable?

Yes:

  • Short-Term Capital Gains (STCG) on listed shares are taxed at 20% (for sales on/after July 23, 2024; 15% before that).
  • Long-Term Capital Gains (LTCG) are taxed at 12.5% if gains exceed ₹1 lakh (for sales on/after July 23, 2024; 10% before that).

4. Are dividends from shares taxable?

Yes. All dividends, including those from equity mutual funds and company shares, are fully taxable at slab rate. TDS is applicable if dividends exceed ₹5,000 from one company in a year.

5. Can I claim losses from share trading or investments?

Yes. Losses can be:

  • Set off against gains of the same type (e.g., STCL against STCG)
  • Carried forward for up to 8 years if declared in your ITR before the deadline

Buyback-related losses can also be carried forward (see next question).

6. How are share buybacks taxed now?

From October 1, 2024, buybacks by listed companies are treated as deemed dividends, taxable under “Income from Other Sources.” You can still claim a capital loss (acquisition cost minus zero sale value) which can be carried forward, provided both are disclosed properly in your ITR.

7. I sold shares both before and after July 23, 2024. What should I do?

You must split your capital gains into:

  • Sales before July 23, 2024 (old tax rates apply)
  • Sales on/after July 23, 2024 (new tax rates apply)

The ITR forms have separate fields for each. Ensure accurate dates in your computation.

8. What documents are needed for filing ITR for share market income?

You should keep:

  • Demat statements (CDSL/NSDL)
  • Contract notes from brokers
  • AIS and Form 26AS
  • Dividend income records
  • Purchase/sale invoices for shares
  • Buyback offer letters (if any)

You don’t need to upload them, but must retain them in case of verification.

9. I only earned capital gains below ₹1.25 lakh. Do I still need to file?

Yes, if your total income crosses the basic exemption limit (₹2.5 lakh under old regime, ₹3 lakh under new), or you want to:

  • Claim a refund
  • Report capital losses
  • Maintain continuity for carry-forward losses

Also, filing helps match your AIS data and avoid compliance issues.

10. What’s the due date to file ITR for AY 2025–26?

For most individuals, the due date is September 15, 2025 (extended from July 31 due to updated rules and form changes). File early to avoid penalties and processing delays.

11. Is filing ITR mandatory if I had only losses from shares?

Yes, if you want to carry forward the losses, filing before the due date is compulsory. Otherwise, the losses will lapse and can’t be adjusted in future years.

12. Can salaried people with stock income use ITR-1?

Yes, but only if:

  • Your LTCG from listed shares is ≤ ₹1.25 lakh
  • No STCG, F&O, intraday income, or carry-forward loss
  • No foreign income or complex deductions

If these conditions aren’t met, use ITR-2 or ITR-3.