FNO loss against salaried income.

Discussion in 'Derivatives' started by vikram.exe, May 29, 2009.

  1. vikram.exe

    vikram.exe New Member

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    Hi,
    I have a query...
    Let say some one has a total taxable income of Rs. 2,00,000
    So the Income tax for him is: 10% of 50,000 = Rs. 5,000

    Lets assume that this amount has already been paid by the company as TDS (tax deduction at source) and the same person is trading in FNO and has current loss of Rs 50,000 (so sad of him :(.....)

    I know that FNO income (profit/loss) is treated as BUSINESS income. So my doubt is: Can this loss of Rs. 50,000 in FNO can be adjusted against the Taxable income there by claiming the money by filing ITR (Income tax return) ?

    Thanks in advance....

    Regards
    Vikram
     
  2. aravinthrajm

    aravinthrajm Member

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    Dear vikram,

    There are no clear instructions from IT department that FNO is to be treated as Short Term Capital Gains / Loss or Business Income. Still I have so many cases that deals FNO as Business Income. So far assessments are complete without any issues. I think you can do the same and treat as Business Income and set off your TDS and claim refund.

    But one thing is to be kept in mind... if you have cash market shares buy/sell then there are chances that AO can argue to take your FNO trades into short term capital gains/losses.
     
  3. hitesh

    hitesh Active Member

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    The Law is very clear. FNO lossess are business loss and hence cannot be set off against salary income.
    However, you can show loss in ITR to enable you to carry forward loss to next year to set off against profit of the next year.
     
  4. vikram.exe

    vikram.exe New Member

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    Thanks aravinthrajm and Hitesh....
     
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