I recently made a mistake on Zerodha and now I’m feeling a bit lost about what to do next. Here’s the situation:
I accidentally placed a MIS (Margin Intraday Square-off) order on Zerodha, but as soon as I realized my error, I exited the order before day end, resulting in a loss. Now, I’m not sure about the tax implications of this trade, especially regarding which Income Tax Return (ITR) form to file.
Here are the details of the trade from Zerodha’s tax P&L report:
- Buy Value: ₹24,797
- Sell Value: ₹24,691
- Profit: -₹106
- Taxable Profit: -₹106
- Turnover: ₹106
a) I’m confused about the turnover calculation. I went over some articles on internet, according to them it should be the sum of the Buy Value and Sell Value. But according to the report, it’s equal to the profit. Can someone clarify this?
Also I had exited the complete order at once but the P&L shows two sell entries(2469.1 & 22221.9). Why that may be the case? Why isn’t it shown in a single entry if I bought and sold all at once?
b) I don’t plan on carrying forward losses or doing any more intraday trades in the future. Do I really need to file ITR 3 or ITR 4 for this? And if I do need to file ITR 4, does the income limit of 50 lakhs(mentioned for ITR4) apply to total income (salary + intraday gains) or just income from intraday trading? What if my salary income exceeds 50 lakhs?
c) Additionally, I found terms like audits and section 44ad etc being used in various articles. These went over my head. Can someone explain these concepts in simple terms so that a noob like me can understand?
d) If I do need to file ITR-3/4 what fields/sections do I need to file? Any resource which explains this filing in easy words would be really helpful.
e) Do I need to get an audit done? And if so, who can perform the audit? Does it have to be a Chartered Accountant (CA)?
f) Lastly, is there an option in Zerodha to permanently disable the MIS button to prevent this mistake from happening again?
I’d appreciate any guidance or advice you can offer. Thanks in advance! 
Hey @tiviyog496,
The turnover will be ₹106 in your case. Moreover, an audit is required in trading income when your turnover crosses ₹10 crores. Hence, in your case, an audit is not applicable.
Intraday trading is classified as business income and hence, you will have to file ITR-3 to report the profits/losses.
Hope this helps!
Thanks @Quicko
What sections in ITR 3 do I need to fill? Could you please point me to a literature which will have all the details that I may need?
Also how much of an extra effort is it from ITR2?
