No requirement of script wise reporting for Intraday and Short Term Trading

The Finance Act,2018 allowed exemption to the gains made on the listed shares/specific units up to 31.01.2018 by introducing grandfathering mechanism for computation of long term capital gain for these shares. The script wise details in the return of income for AY 2020-21 is required to be filled up only for the reporting of the long term capital gains for these shares/units which are eligible for the benefiting of grandfathering.

As the grandfathering is to be allowed by comparing different values (such as cost, sales price and and market price as on 31.01.2018) for each script wise details for computing capital gains of these shares/units. The script wise details are not required in income tax return forms for for AY 2020-21 for shares/units which are not eligible for gradfathering.

Without the reporting requirement, there may be situation where taxpayer may not claim or wrongly claim the benefit of grandfathering due to lack of understanding of the provision of grandfathering. Also, if the above calculation is not script wise and taxpayer is allowed to enter the total figures only, there will be no way for the income tax authorities to check the correctness of the claim and therefore many returns will required to be audited, which may lead to unnecessary grievance at later stage. If script wise script wise long term capital gain is available, it can be cross verify by the department electronically with the stock exchange, brokerage companies, etc and there will be no need to subject these income tax returns to further audits or scrutiny.

Thus the main intent behind requiring script wise detail is to facilitate the taxpayer in correctly computing the long term capital gains on these shares/units.”

As per above press release CBDT certify that there is no requirement of script wise reporting for intraday traders or short term sales/purchase.

Regards,

Team Fintaxpro

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