Discussion on section 44AD of IT Act

[Vertigo_1985]

Re: Zerodha Part 3

Agreed ST, its just that we are approaching the wrong person. As someone suggested approaching Namo would be better. I have heard cases where things got done quickly when people approached him.

So lets find out ways to so that our voice reaches to him directly...

 

[HEM]

Re: Zerodha Part 3

Agreed ST, its just that we are approaching the wrong person. As someone suggested approaching Namo would be better. I have heard cases where things got done quickly when people approached him.

So lets find out ways to so that our voice reaches to him directly...

(1) https://twitter.com/narendramodi

(2) http://pmindia.gov.in/en/

(3) http://pmindia.gov.in/en/interact-with-honble-pm/

(4) Narendra Modi Office Contact Details

Narendra Modi Office Address : South Block, Raisina Hill, New Delhi-110011, India

Narendra Modi Office Phone Numbers : +91-11-23012312

Narendra Modi Office Fax Numbers : +91-11-23019545,23016857

Narendra Modi Official Website : www.narendramodi.in

 

[ethan hunt]

Re: Zerodha Part 3

May be. But you have to see how clever the law is.

if your turnover > 1cr which is highly unlikely for a retail trader so they added clause if the profits is less than 8% which will be most likely if you are profitable.

This clause was deliberately added although why 8% exactly i have no idea.

Question is why will the ministry or Mr Jaitely even bother to listen to us retail traders when they are too busy accumulating wealth when they are in power.

My understanding which is usually wrong is as below...

8% clause is inserted so that businesses do not under report their profits.

a) Prior to A/Y 2011-12, 44AD was only applicable to the business of civil construction. However, it is now applicable to all types of businesses.

As soon as you delete words civil construction then it applies to every biz.

b) As FNO = Non Speculative Biz & Intraday = Speculative Biz, 44AD applies.

Even if delivery trades are *too much* (depends on whims & fancy of IT/AO) it will also considered as biz.

Ramdev Agalwal (Motilal Oswal) said on one TV show AO has been given too much discretion (to treat trades as biz or investment). Imagine investors like him too are harrassed/hasseld.

Actually no babu at CBDT/IT had applied his mind that how these 2 provisions a+b will affect traders in market. On the top of it ICAI/CAs jumped in to define T.O. incorrectly (options premiuim received to be added to T.O. even if squared off). Unless someone takes on IT dept in courts & courts sets it right, no babu + CA will be interested in setting the records right. Maybe there exists a court judgement which sets out guidelines, but I have not come across one yet.

Interestingly, MCX Commodity trading is not a Biz as MCX is not recognised stock exchange it is a commodity exchange. So maybe 44AD does not applies to it.

Also Currency trading at NSE is not a Biz as currency contracts are not covered as per definition as laid out in SECURITIES CONTRACTS (REGULATION) ACT. So maybe 44AD does not applies to it.

It is quite common to see CAs to differ on how to calculate T.O.

Too confusing ...

 

[Smart_trade]

Re: Zerodha Part 3

My understanding which is usually wrong is as below...

8% clause is inserted so that businesses do not under report their profits.

a) Prior to A/Y 2011-12, 44AD was only applicable to the business of civil construction. However, it is now applicable to all types of businesses.

As soon as you delete words civil construction then it applies to every biz.

b) As FNO = Non Speculative Biz & Intraday = Speculative Biz, 44AD applies.

Even if delivery trades are *too much* (depends on whims & fancy of IT/AO) it will also considered as biz.

Ramdev Agalwal (Motilal Oswal) said on one TV show AO has been given too much discretion (to treat trades as biz or investment). Imagine investors like him too are harrassed/hasseld.

Actually no babu at CBDT/IT has applied his mind that how these 2 provisions a+b will affect traders in market. On the top of it ICAI/CAs jumped in to define T.O. incorrectly (options premiuim received to be added to T.O. even if squared off). Unless someone takes on IT dept in courts & courts sets it right, no babu + CA will be interested in setting the records right. Maybe there exists a court judgement which sets out guidelines, but I have not come across one yet.

Interestingly, MCX Commodity trading is not a Biz as MCX is not recognised stock exchange it is a commodity exchange. So maybe 44AD does not applies to it.

Also Currency trading at NSE is not a Biz as currency contracts are not covered as per definition as laid out in SECURITIES CONTRACTS (REGULATION) ACT. So maybe 44AD does not applies to it.

It is quite common to see CAs to differ on how to calculate T.O.

Too confusing ...

Your views mostly correct.

Last time also there was discussion on this issue. The term turnover is not defined anywhere. ICAI the CA institute has said the sum of profits and losses but they dont say whether netted on per scrip/per settlement basis as per view taken by Zerodha on advice from some CAs. But ICAI paper on this is unclear. Similarly in case of options the ICAI definations seems to be originating out of no experience in this area.

We have accepted zerodha iew because it is convenient for us too but IT department is free to not accept this view. I know few CAs and Tax officials who consider turnover as sum of profits/ loss on each trade and then add it. This means each trade working of profits/loss on FIFO basis on Excel sheet ....that is going to be hell of a job and only can be done by software programme.

I hope Govt will atleast clarify the defination by giving some examples and remove the ambiguity...till then I am going with Zerodha defination and keeping my fingers crossed.Good that Nithin Kamath mentioned Turnover defination in his petition so Govt has to correct it or accept it, smart way of getting Govt committed on the issue...but Gove can be smarter by ignoring or circumventing the defination.

Smart_trade

 

[ethan hunt]

Re: Zerodha Part 3

Govt doing away with retrospective tax keeping FDI/FII in view.

What about Indian citizens who have to deal with retrospective tax (you can be called to explain IT retuns of last 8 years) ???

 

[Brill]

Re: Zerodha Part 3

Govt doing away with retrospective tax keeping FDI/FII in view.

What about Indian citizens who have to deal with retrospective tax (you can be called to explain IT retuns of last 8 years) ???

"Atithi Devobhava"!!!:lol:

 

[Smart_trade]

Re: Zerodha Part 3

"Atithi Devobhava"!!!:lol:

And " Ghar ki murgi daal barabar ??"

Smart_trade

 

[Smart_trade]

Re: Zerodha Part 3

Govt doing away with retrospective tax keeping FDI/FII in view.

What about Indian citizens who have to deal with retrospective tax (you can be called to explain IT retuns of last 8 years) ???

Keep your fingers crossed and hope that 8 years passes fast and your every year goes behind " kaal ka parda"with addition of every new year. It is 7 years for IT I think ....let us not increase it by 1 more year

ST

 

[classifiedindian]

Re: Zerodha Part 3

Signed the petition.. It's a good initiative! Thanks z

 

[Smart_trade]

Re: Zerodha Part 3

All the taxation related posts will be shifted to taxation threads in the evening to keep this thread clean.

ST