Capital Gains from Zerodha / Groww: How to File ITR Correctly (FY 2025-26)

If You Traded Stocks or Mutual Funds — You Cannot Use ITR-1

The most common mistake Indian investors make: they traded on Zerodha or Groww during the year and still file ITR-1 (the simple salaried form). ITR-1 cannot accommodate capital gains from equity, mutual funds, or any investment. If you have capital gains — even a small ₹5,000 gain — you must file ITR-2 (or ITR-3 if you also have F&O or business income).

Step 1 — Download Your Capital Gains Statement from Your Broker

Each broker provides a "Tax P&L" or "Capital Gains" report for the financial year. This is not the regular P&L — it is specifically formatted for tax filing.

Zerodha (Kite)

1. Go to console.zerodha.com
2. Click Portfolio → Tax P&L
3. Select FY 2025-26 (April 2025 to March 2026)
4. Download as CSV or view the summary — it shows STCG, LTCG, intraday, and F&O separately

Groww

1. Log in to Groww → Account → Reports
2. Select Capital Gains Statement and the financial year
3. Download the PDF or Excel report

Angel One

1. Log in → Portfolio → P&L Statement
2. Select the financial year and download

Upstox, 5paisa, ICICI Direct, Others

All major brokers provide a tax P&L report from their web portal or app under the Reports or Portfolio section. Look for "Capital Gains Statement" or "Tax P&L" and ensure you select the correct financial year (April 2025 – March 2026).

Step 2 — Understand the Tax Rates (Budget 2024 Changed Them)

The Union Budget 2024 significantly changed capital gains tax rates, effective 23 July 2024. For FY 2025-26, the full revised rates apply:

Equity Shares & Equity Mutual Funds

• STCG (held < 12 months): 20% (was 15% before 23 July 2024)
• LTCG (held > 12 months): 12.5% on gains above ₹1.25 lakh (exemption limit raised from ₹1L; rate was 10% before)
• Indexation benefit: Removed for equity — no indexation allowed

Debt Mutual Funds and Bonds

• No holding period distinction — all gains taxed at your applicable slab rate (both short and long term)
• Indexation benefit removed for debt MFs purchased after 1 April 2023

Real Estate and Other Assets

• LTCG (held > 24 months): 12.5% without indexation, OR 20% with indexation — whichever is lower (option available for property purchased before 23 July 2024)

F&O (Futures & Options)

• F&O income is not capital gains — it is treated as business income
• Must be reported in ITR-3, not ITR-2
• Taxed at slab rate
• If F&O turnover exceeds ₹10 crore (or ₹1 crore with profit < 8%), tax audit required

Step 3 — Report Capital Gains in ITR-2

In ITR-2, capital gains are reported in Schedule CG. You need to enter:

• STCG from equity/equity MF (Section 111A): Total short-term gains; taxed at 20%
• LTCG from equity/equity MF (Section 112A): Scrip-wise or fund-wise; gains above ₹1.25 lakh taxed at 12.5%
• Other STCG/LTCG: Debt MF, property, gold — at slab or 12.5%

Scrip-wise Entry in ITR-2 (Section 112A)

For LTCG above ₹1.25 lakh from listed equity, the ITR-2 form requires you to enter each scrip / fund separately: ISIN, name, acquisition date, sale date, quantity, cost of acquisition, and sale consideration. This is why you need the detailed tax P&L statement from your broker, not just a summary number.

Most brokers provide this in a format you can directly use for ITR-2 Schedule 112A. FirstReports and our CAs handle this scrip-by-scrip data entry for you.

Step 4 — Capital Losses and Set-Off Rules

If you made losses on some trades, they can offset gains — reducing your tax liability:

• STCG losses can offset both STCG and LTCG from any capital asset
• LTCG losses can only offset LTCG — not STCG
• Intraday losses are speculative losses and can only offset speculative gains (e.g., other intraday gains) — not delivery-based capital gains
• Unabsorbed losses can be carried forward for 8 years — but only if you file your ITR on time (before the due date)

This is one reason to file before 31 July 2026 even if you made net losses — you lock in the carry-forward benefit.

Multiple Brokers? You Need to Consolidate

If you traded on Zerodha AND Groww AND Angel One in the same year, you need to combine all three capital gains statements into a single consolidated figure for your ITR. This means:

• Combining STCG from all brokers
• Combining LTCG scrip-wise from all brokers
• Netting losses correctly across brokers and categories

This is exactly what FirstReports automates — upload CSV/Excel files from multiple brokers and get one consolidated tax-ready statement. See how it works →

TDS on Capital Gains

For most retail investors trading via Indian brokers, TDS is not deducted on capital gains from equity. You pay capital gains tax as advance tax (quarterly) or self-assessment tax (before filing). The exception is mutual fund redemptions — AMCs deduct TDS at 10% on LTCG above ₹1 lakh for domestic investors (non-residents have different rules).

Common Mistakes with Capital Gains ITR

• Filing ITR-1 when you have capital gains (defective return)
• Not reporting LTCG because it is "below ₹1.25 lakh" — you still need to declare it, even if it is exempt
• Treating intraday gains as capital gains instead of business income
• Missing out on loss set-off by not entering losses
• Entering only summary figures instead of scrip-wise data for Section 112A

Filing Capital Gains ITR with a CA

Capital gains ITR (ITR-2) is one of the most error-prone returns in India — wrong scrip entries, incorrect rate application after Budget 2024, and missed loss set-offs are common. FirstReports offers CA-assisted ITR-2 filing from ₹1,999, with full capital gains computation and scrip-wise Schedule 112A preparation included. View plans →