The season of filing income tax return (ITR) has started. Millions of taxpayers have filed ITRs. However, this time the deadline to file income tax returns is 15 September. If you have more than one source income or you trading in shares, then you need to be careful in returns filing. If there is a mistake in the calculation of income, then you may get the notice of the Income Tax Department.
Income wrong calculation
Sujit Bangar, founder of Taxbadi.com, has told about an interesting case of mistake in the calculation of income. He has posted a linkedIn. He has told how a person gets the Income Tax Department due to the mistake made in the calculation of income (Income Tax Department) Notice to pay Rs 74,375 income tax from side to side. This can happen to anyone. Especially those people who do share trading may get a big shock.
Mistake was detected when tax notice comes
Bangar has told about a full-time investor. He has written in his post that Rahul got a profit of Rs 7 lakh from selling shares. He thought that his income is less than Rs 12 lakh, so that he would not have to pay any tax. However, when he received a notice to pay a tax of Rs 74,375 from the Income Tax Department, he received a loud shock. He realized his mistake when he understood the whole matter.
Where made a mistake in calculation
There was a variety of calculations in Rahul’s income. He lost Rs 3 lakh from intraday trading. He had a gain of Rs 2.5 lakh from F&O. He had a short -term capital gains of Rs 3.5 lakh from selling shares. There was a long term capital gain of Rs 4 lakh. He calculated the calculation of his income Rs 7 lakh (₹ 2.5 lakh + ₹ 3.5 lakh + ₹ 4 lakh – ₹ 3 lakh = ₹ 7 lakh). He felt that since his income is less than Rs 12 lakh annually, he would not have to pay any tax.
Different taxes for different income
Rahul made a big mistake in the calculation of income. In income tax rules, income from different sources is kept in different categories. Tax rules are also different for each category. Intrade transactions are considered a speculative business. F&O transactions are considered non-speculative transactions. Short Term Capital Gains costs 20 per cent tax, while long -term capital gains tax is 12.5 per cent tax. This tax is levied only when the long term capital gence in a financial year is more than Rs 1.25 lakh.
Also read: Income Tax Return 2025: If you do F&O trading, then know the rules of tax, otherwise you will get caught in trouble
12 Terms of Tax Rebate Terms
Rahul did not know properly about the rules of income tax. According to his own, he added all the profits and reduced the loss from it. This method of calculation is wrong according to the rules of income tax. It is also wrong for Rahul to believe that since his income is less than Rs 12 lakh annually, so that he will not have to pay tax. The Income Tax rule says that under section 87, income up to Rs 12 is not taxed annually. However, this rebate does not apply if there is a long term capital gain.
Take care in returns filing
It is clear from this matter that if a taxpayers have income from many sources, especially share trading, then they will have to take care in the calculation of income based on their profit and gense. The rule of tax on every income has to be kept in mind. Not doing so will make the calculation wrong and the notice of the Income Tax Department will come. This will greatly increase the difficulty for taxpayers. To avoid this difficulty, the income of income will have to be done according to the rules of tax and tax will have to be paid on it.