Answer

1. F

   Facts

   Delivery based investments go under capital gains, and F&O goes under business income. Both are reported in the same ITR-3, in Schedule CG and Schedule BP.

2. P

   Provisions and law

   • Sec 112A (now Sec 198)Long-term gains on listed equity
   • Sec 111A (now Sec 196)Short-term gains on listed equity
   • Sec 28 (now Sec 26)Business income
3. A

   Analysis

   If you sold delivery shares for a long-term gain of ₹2,00,000 and had F&O profit of ₹3,00,000, ₹75,000 of the LTCG is taxable at 12.5% after the ₹1,25,000 exemption, and F&O is at slab. An F&O loss can be set off against the capital gain in the same year, but a capital loss cannot be set off against F&O profit. Keep the broker's separate statements for delivery and F&O trades as your working.

4. C

   Conclusion

   1. 1Separate delivery and F&O trades
   2. 2Compute capital gains and business income
   3. 3Apply set off rules between heads
   4. 4Report both in ITR-3

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