Which ITR form should I use to file returns?
Categorization of income—loss from trading in options and derivatives, besides day trading—into business income, capital gains, etc., would also depend on specific facts of the case such as intention, frequency of transactions, period of holding of the assets, treatment in books of accounts
I am a salaried individual and have been regularly filing income tax returns (ITR). So far, I have been using the ITR-2 form since I invest in equity and also income from other sources, mainly rental income from properties. In fiscal 2023 , I was unemployed for the first two quarters. During this period, I used to trade in derivatives (options) and day trading in equity. I ended up making net losses in both. Towards the end of the year, I got a job and stopped trading in equity and options.
Since income from derivatives is considered as business income, do I need to get my balance sheets audited by a chartered accountant and use ITR-4 form for the purpose of filing my tax returns. It may be noted here that my turnover from options was less than ₹1 crore.
Can I avoid filing tax returns using ITR-4 form and instead opt for ITR-2 form as in the past at the cost of not carrying forward my losses?