First I should tell you I not a CA nor I have any relation/connection with any CA or firm but I think you should either spend lot of time researching the topic or talk to a CA you can trust. In your case an audit may also be required.
The classification is like this
If you do F & O or intra-day trading that is compulsorily classified as business income and no case of STCG or LTCG.
Tax audit applicability u/s 44AB for share transactions. There are two types of transactions in share trading by business/individual.
Case 1: Delivery based transactions : Where the transaction for the purchase or sale of any commodity including stocks and shares is delivery based whether intended or by default, the total value of the sale is to be considered as turnover. So if the turn-over exceeds one crore, then tax audit is necessary.
Case 2: Speculative transactions : A speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically settled otherwise than by the actual delivery or transfer of the commodity or scripts in most cases. Thus, in a speculative transaction, the contract for sale or purchase which is entered into is not completed by giving or receiving delivery so as to result in the sale as per value of contract note. The contract is settled otherwise and squared up by paying out the difference which may be profitable or loss. As such, in such transaction the difference amount i.e. profit or loss are termed as ‘turnover’. In the case of an assessee doing speculative transactions there can be both positive and negative difference arising by settlement of various such contracts during the year. Each transaction resulting into whether a positive(profit) or negative difference(loss) is an independent transaction. In such transactions though the contract notes are issued for full value of the purchased or sold asset the entries in the books of account are made only for the differences. Accordingly, the aggregate of both positive and negative differences(total of profit and total of loss) is to be considered as the turnover of such transaction for determining the liability to audit vide section 44 AB.
In the same way, Derivatives, futures and options, transactions are completed without the delivery of shares or securities. These are also squared up by payment of differences. The contract notes are issued for the full value of the asset purchased or sole but entries in the books of account are made only for the differences. The transactions may be squared up any time on or before the striking date. The buyer of the option pays the premia. The turnover in such types of transactions is to be determined as follows:
The total of profit and loss separately to be totaled in two groups and shall be taken as turnover.