The Finance Ministry on Saturday issued a clarification stating that there is no requirement of scrip-wise reporting for day trading and short-term sale or purchase of listed shares in income tax returns for assessment year 2020-21.
The clarification came after certain media reports about “stock traders / day traders are required to provide scripture-wise details in the return of revenues for AY 2020-21,” the ministry added. The scrip-like details are needed when submitting ITR for AY 2020-21 for reporting long-term gains (LTCG) for listed stocks or specified units eligible for grandfathering.
The Ministry further said that Finance Act, 2018 allowed tax exemption to the gains made on the listed shares/specified units up to January 31, 2018, by introducing grandfathering mechanism for computation of long-term capital gains for these shares.
“The main intent behind requiring scrip wise detail is to facilitate the taxpayer in correctly computing the long-term capital gains on these shares/units. Requirement to provide scrip wise information in the income tax return is not unique to India. Internationally also, the taxpayer is required to provide scrip wise information for reporting capital gains. For example in USA, a taxpayer having capital gains from transfer of shares is required to fill scrip wise details in Schedule-D of Form 1040 – income tax return form in USA,” stated the Press Release.
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