AY 2025-26 on WebNotes

How to claim STT rebate or credit in India

Tue, 12 May 2026 00:00:00 +0000

Securities Transaction Tax (STT) is a transaction levy collected at source by stock exchanges on the purchase and sale of securities. Many traders search for an STT rebate or tax credit, recalling that such a rebate existed before 2009. This guide clarifies the current legal position, explains when STT is deductible as a business expense, and shows how to enter it correctly in ITR-3.

How to compute dividend tax on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Dividends received from Indian companies and equity mutual fund distributions have been fully taxable in the hands of the investor since the Finance Act 2020 abolished the Dividend Distribution Tax (DDT) and removed the exemption under section 10(34) and section 10(35). From FY 2020-21, all dividends are taxed at the investor’s applicable income tax slab rate under Income from Other Sources. This guide explains how to identify dividend income from Zerodha Console and Zerodha Coin, compute the tax, and report it correctly in ITR.

How to compute LTCG with grandfathering on Zerodha

Tue, 12 May 2026 00:00:00 +0000

When the Finance Act 2018 reintroduced long-term capital gains tax on listed equity and equity-oriented mutual funds under section 112A, it included a grandfathering rule to protect gains accrued before the provision came into force. Under this rule, the cost of acquisition for equity held on 31 January 2018 is deemed to be the Fair Market Value (FMV) on that date if the actual cost is lower, but only to the extent of the sale consideration. This ensures that gains accrued up to 31 January 2018 are not taxed under section 112A.

How to compute turnover for F&O audit under section 44AB

Tue, 12 May 2026 00:00:00 +0000

The single most consequential computation for F&O traders in India is the turnover figure used to determine whether a tax audit under section 44AB of the Income Tax Act is mandatory. Importantly, this is not the gross contract value of futures and options trades (which would be an astronomically large number even for a small trader). The Institute of Chartered Accountants of India (ICAI) has specified a distinct method, known as the absolute-profit-loss method, which yields a much smaller and more economically meaningful turnover figure. This guide explains the method in detail and shows how to apply it using Zerodha Console data.

How to declare F&O as business income in India

Tue, 12 May 2026 00:00:00 +0000

Futures and options (F&O) trading on a recognised stock exchange is treated as non-speculative business income under the Income Tax Act 1961. This classification has significant practical implications: F&O losses can be set off against other heads of income (except salary), carried forward for eight years, and deducted against future business profits. This guide explains the statutory basis, the correct method of computation, allowable deductions, and how to report F&O income in ITR-3.

How to do tax-loss harvesting on Zerodha at year-end

Tue, 12 May 2026 00:00:00 +0000

Tax-loss harvesting is the practice of selling securities that are showing an unrealised loss before the end of the financial year to realise the loss, offset it against capital gains, and reduce the overall tax liability. Under the Income Tax Act 1961 and as amended by the Finance Act 2024, capital gains tax rates on listed equity are 20% for short-term gains (section 111A) and 12.5% on LTCG above Rs 1.25 lakh (section 112A). Harvesting losses before 31 March can meaningfully reduce the taxable gain, particularly for investors who have accumulated significant unrealised losses in a falling market.

How to download Form 26AS-matching reports on Zerodha

Tue, 12 May 2026 00:00:00 +0000

Before filing an income tax return, every investor and trader should reconcile the trading data from Zerodha Console with the Annual Information Statement (AIS) and Form 26AS on the income tax portal. The AIS aggregates income data reported by all third-party filers (stock exchanges, depositories, companies, mutual funds), while Form 26AS records TDS and advance tax payments. Filing without reconciling these sources can trigger a notice under section 143(1) for mismatch. This guide covers the complete reconciliation procedure.

How to download the capital gains statement on Zerodha

Tue, 12 May 2026 00:00:00 +0000

The capital gains statement available through Zerodha Console consolidates every equity delivery sale in a financial year, computes the holding period, and maps each gain or loss to the correct section of the Income Tax Act, 1961. The statement is the primary input for Schedule CG and Schedule 112A in ITR-2 or ITR-3. This guide walks through the download procedure, explains the key columns, and flags the Finance Act 2024 rate changes that apply from 23 July 2024.

How to download the Tax P&L statement from Zerodha Console

Tue, 12 May 2026 00:00:00 +0000

The Tax P&L statement on Zerodha Console is Zerodha’s primary tax-reporting output. It aggregates all trades executed through the Zerodha platform in a given financial year and classifies them by asset class, holding period, and applicable section of the Income Tax Act, 1961. The report is designed as a starting point for populating Schedule CG (capital gains) and the business-income schedule in your ITR-2 or ITR-3.

How to file ITR-2 with Zerodha capital gains

Tue, 12 May 2026 00:00:00 +0000

ITR-2 is the income tax return form for resident individuals and Hindu Undivided Families (HUFs) who have capital gains from equity, debt, or other securities but do not carry on any business or profession. If your Zerodha account has only equity delivery trades and no F&O activity classified as business income, ITR-2 is typically the correct form. This guide walks through the end-to-end filing process for Assessment Year 2025-26 (Financial Year 2024-25) using the capital gains report downloaded from Zerodha Console.

How to file ITR-3 with Zerodha F&O turnover

Tue, 12 May 2026 00:00:00 +0000

ITR-3 is the income tax return form for individuals and Hindu Undivided Families (HUFs) who have income or loss from a business or profession. Because the Income Tax Act classifies F&O trading as non-speculative business income under the proviso to section 43(5), any trader with even a single F&O contract in the financial year must file ITR-3 rather than ITR-2. This guide covers the complete procedure for Assessment Year 2025-26 (Financial Year 2024-25) using the Tax P&L data available on Zerodha Console.

How to report intraday speculative income in ITR-3

Tue, 12 May 2026 00:00:00 +0000

Intraday equity trading, buying and selling the same share on the same trading day without taking delivery, is classified as a speculative transaction under section 43(5) of the Income Tax Act 1961. The income or loss from intraday trading is treated as speculative business income, which must be reported in ITR-3. This guide covers the end-to-end procedure for declaring intraday income using data from Zerodha Console.

How to use the Quicko integration on Zerodha Console

Tue, 12 May 2026 00:00:00 +0000

Zerodha Console offers a built-in link to Quicko, a tax-filing platform that imports trading data directly from Zerodha and assists in preparing and filing ITR-2 or ITR-3. For investors and traders who find the manual method of downloading the capital gains CSV and entering data into the ITR utility tedious, the Quicko integration offers a faster alternative, particularly for returns with hundreds of scrip-level entries in Schedule 112A.

ITR-2 (Income Tax Return)

Mon, 11 May 2026 00:00:00 +0000

ITR-2 is the Income Tax Return form prescribed by the Central Board of Direct Taxes (CBDT) for use by individuals and Hindu Undivided Families (HUFs) who have income from sources other than profits and gains from business or profession. It is the form most commonly used by salaried employees and pensioners who also have capital gains from the sale of equity shares, equity mutual funds, property, or other assets, but who do not carry on any business activity.

ITR-3 (Income Tax Return)

Mon, 11 May 2026 00:00:00 +0000

ITR-3 is the Income Tax Return form prescribed by the Central Board of Direct Taxes (CBDT) for individuals and Hindu Undivided Families (HUFs) who have income from profits and gains of business or profession. It is the form applicable to equity derivatives traders, intraday equity traders, freelancers, consultants, proprietors, and partners in a firm, among others. Where an investor also has capital gains income alongside business income, all income must be reported in a single ITR-3 return rather than splitting it across multiple forms.