Discussion on section 44AD of IT Act

[ritesh.bafna88]

I'll answer that with a counter question.

Should a traffic cop , while dealing with a motorist who broke a red signal , "interpret" the law as per his cognitive skills or fine him ?
The law btw is clear and says fine him.

although i am not a traffic cop but yes the traffic cops are open to use discretion and fine if truly there was not a need for it. LAW is open to interpretation and that is why when used against you there are options to appeal.

let me tell you if interpretation was not a part of LAW than consider this why "income" is not defined in INCOME TAX ACT?

 

[nirav_j]

although i am not a traffic cop but yes the traffic cops are open to use discretion and fine if truly there was not a need for it. LAW is open to interpretation and that is why when used against you there are options to appeal.

let me tell you if interpretation was not a part of LAW than consider this why "income" is not defined in INCOME TAX ACT?

Lol .. You dont have to be a traffic cop to know that if you break a signal, you are liable to be fined.

That's unambiguous and not open to interpretation.

You will not see one traffic cop consult his superior, saheb signal todlela aahe .. Fine maaraycha ki arrest karaycha ?

Anyway this is going off topic, but I maintain, this trouble is caused thanks to gown wearing idiots in ICAI who couldn't come up with a simplified way for accounting and taxation of F&O.

Derivatives have been around for two decades now,still these folks are just warming their asses and lighting candles of course .. Sheer incompetence.

 

[ritesh.bafna88]

Lol .. You dont have to be a traffic cop to know that if you break a signal, you are liable to be fined.

That's unambiguous and not open to interpretation.

You will not see one traffic cop consult his superior, saheb signal todlela aahe .. Fine maaraycha ki arrest karaycha ?

Anyway this is going off topic, but I maintain, this trouble is caused thanks to gown wearing idiots in ICAI who couldn't come up with a simplified way for accounting and taxation of F&O.

Derivatives have been around for two decades now,still these folks are just warming their asses and lighting candles of course .. Sheer incompetence.

LOL... 2 questions no answers...

Amateur...

Ignored...

Regards

 

[nirav_j]

LOL... 2 questions no answers...

Amateur...

Ignored...

Regards

That's swell, a cpl posts back you wanted to see my intellect, you hell bent on displaying lack of yours ?

 

[Smart_trade]

then why don't you enlighten all as to what LAW should be if not open to interpretation?

let see how forward is your intellect!!!

Sorry to say but the way ICAI study paper dealt with options clearly indicates that the committee lacks understanding about options.It is high time that they have a re-look,consult some options experts ( not theoratical professor or accountant types but someone who has traded options and understand them) and come out with some sensible defination of "turnover" in case of options contracts. The current defination is heavily loaded against options traders and is out of ignorance of how options contracts are settled.

Smart_trade

 

[mmca2006]

Sorry to say but the way ICAI study paper dealt with options clearly indicates that the committee lacks understanding about options.It is high time that they have a re-look,consult some options experts ( not theoratical professor or accountant types but someone who has traded options and understand them) and come out with some sensible defination of "turnover" in case of options contracts. The current defination is heavily loaded against options traders and is out of ignorance of how options contracts are settled.

Smart_trade

ST --it is an old discussion going for long time with different IDs , problem is that apart from ICAI no body , no institute ever defines the word turnover for option trading , even Govt. also remained silent regarding turnover. At least ICAI tried to define it ,even if they come out with a sensible definition, IT dept. is not bound to follow it . It is the CBDT who should define the term turnover for option trading but remains silent while implementing sec 44 AD for derivative transactions .Why not option traders mail their view to the Govt. to define Turnover for option trading rather blaming ICAI.

 

[srtrader]

I am salaried person and doing trading in F&O. My turnover is Rs.19000 and Profit is Rs.3000. I am filing my income tax return in cleartax.com. Can anyone please tell what we need to fill the below fields (Pls refer the highlighted box in the screenshot),

http://s24.postimg.org/qxly4d5jp/screenshot_20150704_221917.png

Do I Need to fill those 4 fields in the red box? or just enter the turnover and profit.

 

[canikhil]

I am salaried person and doing trading in F&O. My turnover is Rs.19000 and Profit is Rs.3000. I am filing my income tax return in cleartax.com. Can anyone please tell what we need to fill the below fields (Pls refer the highlighted box in the screenshot),

http://s24.postimg.org/qxly4d5jp/screenshot_20150704_221917.png

Do I Need to fill those 4 fields in the red box? or just enter the turnover and profit.

You should report these columns too. In case the number to be reported in Nil, then fill in Zero in each column.

Further, please note that cleartax has not yet opened filing for ITR-4 for AY 2015-16 yet.

Regards

 

[canikhil]

Sorry to say but the way ICAI study paper dealt with options clearly indicates that the committee lacks understanding about options.It is high time that they have a re-look,consult some options experts ( not theoratical professor or accountant types but someone who has traded options and understand them) and come out with some sensible defination of "turnover" in case of options contracts. The current defination is heavily loaded against options traders and is out of ignorance of how options contracts are settled.

Smart_trade

would you like to throw some light on how the definition is "heavily loaded against the option trader"

 

[oscaramandus11]

Re: General Trading Chat

This post is old but i thought i should share my view on it

With all due respect,

i contradict your view on this topic.

firstly Section 44AD is

" (5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB."

........

further to add on the topic, there are certainly many ambiguities on this topic and no clarification is issued by the government hence interpretation on the basis of bare reading of act along with proper representation is the key. after all the efforts of any individual are limited to how the authority sees the particular situation in this case INCOME TAX Department.

In My View One of the reason for the same topic to never reach the bench of ITAT, HC, SC is because not one knows the correct application.

Regards
CA. Ritesh Bafna

Hi,

Hi,

Will you explain, what are the meaning of the word " Profit " and the word " Loss " with respect to Income Tax Act ?

In my opinion, this is important because in case you have incurred a " Loss " how does the clause " profit less than 8 % " apply for determining audit applicability.

Here the words " Profit " and " Loss " are the key.

" Profit " and " Loss " are two different terms with different meaning. When one uses the word " Profit " it is clearly different from the word " Loss ".

" Profit " means receiving or gain or earning or receipt or positive cash flow or benefit or something which is more than what you started with.

" Loss " means giving or losing or expense or negative cash flow or charge or penalty or something is less than what you started with.

Income tax philosophy is to give to government part of some thing which you earn or gain or profit or end up with more than what you started with.

The words are " income tax " and not " expense tax ".

Please correct my understanding, if wrong.

Rgds,
Oscar
_______________________________
Below is what "canikhil" has to say to my query.

http://www.traderji.com/taxation-matters/98969-you-covered-under-tax-audit.html#post1086228

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