Moment guide · FY 2026-27
I am trading intraday in equities
How is intraday trading profit taxed?
Intraday equity profits are speculative business income under section 43(5), taxed at your slab rate in ITR-3 — the 15%/20% capital gains rates never apply. Speculative losses can offset only speculative profits and carry forward just 4 years, unlike non-speculative losses which carry forward 8. Brokerage and related expenses are deductible in the old regime.
Your legitimate options
Every route the statute actually gives you — with its condition, cap and deadline.
| Route | Condition | Cap / deadline |
|---|---|---|
| Speculative business income | Intraday equity is speculative business u/s 43(5) — profits taxed at your slab rate, not 15%/20% | Slab rate, ITR-3 required |
| Loss set-off restrictions | Speculative losses set off only against speculative profits — never against salary or other income | Carry-forward only 4 years (speculative), not 8 |
| Expense deductions | Brokerage, internet, data and other business expenses are deductible against trading profits | Old regime allows expenses; new regime does not |
The #1 trap
Treating intraday profit like equity capital gains — the 15%/20% rates never apply. Intraday is speculative business taxed at slab, filed in ITR-3, and losses can only offset speculative profits and carry forward 4 years. F&O, in contrast, is non-speculative, so its losses can offset other business income and carry forward 8 years.
The decision path
Follow it top to bottom — the first condition that matches is your answer.
Worked example
Manish, salaried engineer trading intraday on the side
Manish trades intraday in equities as a side activity while earning a salary of ₹15,00,000. In FY 2025-26 his intraday net profit is ₹3,20,000. Under section 43(5), buying and selling the same scrip on the same day is speculative business, so the ₹3,20,000 is business income taxed at his slab rate in ITR-3, not the 15% or 20% capital gains rates he might expect. His marginal slab rate is 30%, so the intraday profit adds about ₹96,000 of tax before cess. He incurred ₹18,000 of brokerage and ₹12,000 of data and internet costs, which he deducts in the old regime, bringing net speculative income to ₹2,90,000. In the same year he also lost ₹1,20,000 on a few bad intraday trades on another stock, and because that is also speculative, the loss offsets his speculative profit only: ₹2,90,000 minus ₹1,20,000 is ₹1,70,000 net speculative income. If the loss exceeded his profit, the remaining speculative loss could not be set against his ₹15,00,000 salary, and it would carry forward only 4 years, not the 8 years available to non-speculative losses. His F&O trading, by contrast, is non-speculative: a ₹60,000 F&O loss can offset other business income and carry forward 8 years. Manish files ITR-3, keeps the broker's P&L statement and the contract notes, and pays advance tax on his trading income if his net liability crosses ₹10,000. A quick call with us dials in the final figure. Manish also keeps a daily contract note register, because the speculative status is determined trade by trade — a position held overnight even once is not intraday, and mixing the two categories in one P&L statement makes the computation unreliable. His broker's statement shows the intraday turnover and the net profit, and he reconciles it against the contract notes before filing ITR-3. The expenses he deducts — brokerage, data feeds and a portion of his internet — must be apportioned between the speculative and non-speculative activity, because a speculative loss can only offset speculative profit, and an expense wrongly allocated to the speculative column changes the carry-forward. If his net speculative loss exceeds his speculative profit, the balance is carried forward four years only if he files the return on time. He also computes advance tax on the combined salary and trading income, because his employer's TDS covers only the salary. A quick call with us dials in the final figure.
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Questions people actually ask
Sections: 43(5), 73, 74, 28 · Last verified 2026-08-11 · Reviewed by Harun Raaj & Associates, Chartered Accountants. Every figure cites the Income-tax Act, 1961 (with ITA 2025 mapping via our section index).