Taxation for Traders / Investors

[carnot11]

any reason/document where you got this 30% flat slab rate on speculative income? I don't recall any specific tax provision for the same.

Intraday trading income(profit or loss)falls under speculation head,but taxed as normal tax slab..

Only income from casino,horse betting,lottery win,profits from Cricket Satta,bet on a street dogs,flying mugans betting taxed at 30%..

Dear Sirs,

Thank you for your posts. I may wrong in my understanding and need to update my knowledge.

As there is no document which says that speculative income / loss from equity intra-day activity are to be taxed at regular slabs, I have taken the stand that all sepculative gain will be taxed at 30 %.

I refer to the below

As per Sec 28 of the income tax act -

Explanation 2.—Where speculative transactions carried on by an assessee are of such a nature as to constitute a business, the business (hereinafter referred to as "speculation business") shall be deemed to be distinct and separate from any other business.

The above are my views and understand and are posted for information purpose only.

The final say is with the tax officer / department.

Enjoy,
CArnot

 

[canikhil]

Dear Sirs,

Thank you for your posts. I may wrong in my understanding and need to update my knowledge.

As there is no document which says that speculative income / loss from equity intra-day activity are to be taxed at regular slabs, I have taken the stand that all sepculative gain will be taxed at 30 %.

I refer to the below

As per Sec 28 of the income tax act -

Explanation 2.—Where speculative transactions carried on by an assessee are of such a nature as to constitute a business, the business (hereinafter referred to as "speculation business") shall be deemed to be distinct and separate from any other business.

The above are my views and understand and are posted for information purpose only.

The final say is with the tax officer / department.

Enjoy,
CArnot

Section 28 is not the taxing section. The tax rate shall depend on the final income of the assessee. For eg is your speculative income is Rs 2.5 lakhs and no other income, then no tax is payable.

Tax rates are specifically provided in the act. and speculative income doesn't attract any special rate. So it is to be included in the total income and taxed at slab rates only.

 

[carnot11]

Section 28 is not the taxing section. The tax rate shall depend on the final income of the assessee. For eg is your speculative income is Rs 2.5 lakhs and no other income, then no tax is payable.

Tax rates are specifically provided in the act. and speculative income doesn't attract any special rate. So it is to be included in the total income and taxed at slab rates only.

Dear Sir,

Thank you for correcting me.

Please clarify for information of all -

In case of speculative gain only - will expenses related to the gain like internet, brokerage, STT, data charges, etc. etc. be allowed for deduction from the gain to arrive at the final figure ?

Enjoy,
CArnot

 

[canikhil]

Dear Sir,

Thank you for correcting me.

Please clarify for information of all -

In case of speculative gain only - will expenses related to the gain like internet, brokerage, STT, data charges, etc. etc. be allowed for deduction from the gain to arrive at the final figure ?

Enjoy,
CArnot

All the expenses mentioned by you are deductible.

 

[rangarajan]

Is Gift( cash ) given by daughter to her Mother is Taxable ?

Is there any limit if not taxable?

Is the interest earned on such gift will be added to daughter's income

Thanks for yr time

 

[traderniftybank]

Is Gift( cash ) given by daughter to her Mother is Taxable ?

Is there any limit if not taxable?

Is the interest earned on such gift will be added to daughter's income

Thanks for yr time

Is Gift( cash ) given by daughter to her Mother is Taxable ?
-- Not taxable, But it will be better, if the amount be gifted by way of banking transaction (cheque, draft, online banking)

Is there any limit if not taxable?
-- Cant say (for cash transaction) but IMO there should be no limit. Needs clarification. But if done by bank route then no limit. There is no tax if gifted by relative(s), as defined. The non taxable limit is 50000 (total), if gifted by non relative, like friend etc.

Is the interest earned on such gift will be added to daughter's income
-- No. The interest earned will be mothers income.

 

[rangarajan]

Is Gift( cash ) given by daughter to her Mother is Taxable ?
-- Not taxable, But it will be better, if the amount be gifted by way of banking transaction (cheque, draft, online banking)

Is there any limit if not taxable?
-- Cant say (for cash transaction) but IMO there should be no limit. Needs clarification. But if done by bank route then no limit. There is no tax if gifted by relative(s), as defined. The non taxable limit is 50000 (total), if gifted by non relative, like friend etc.

Is the interest earned on such gift will be added to daughter's income
-- No. The interest earned will be mothers income.

tradeniftybank

Thanks for the reply & yr time.

I have another query.

Suppose, the receiver of Gift wants to return this Gifted cash amount ( above 50k ) after some yrs, is it prudent to take it as Gift ( Thro bank only ) or as loan to be returned with interest later if situation warrants.
Is there any stipulated holding period for Gift taken.
Why i am asking this is, any one with extra income can give the amount as gift to a relative ( thro bank legally ), who can deposit in FD & the interest earned may not be added to the donor as per yr reply.
And the one who receives the Gift, wants to return it after some years, what happens to the interest earned from Tax angle.
Will the Gift returned will be treated as other income to the original donor & taxed or it will be treated as gift only.

Also, if the receiver of gift is Not an assesse, should she/he file return to show the gift , even though the interest may be less than taxable limit.

 

[traderniftybank]

Suppose, the receiver of Gift wants to return this Gifted cash amount ( above 50k ) after some yrs, is it prudent to take it as Gift ( Thro bank only ) or as loan to be returned with interest later if situation warrants.
---Gifts are non returnable. Though one can make a gift to other side.

Is there any stipulated holding period for Gift taken.
--- No. its your money now.

Why i am asking this is, any one with extra income can give the amount as gift to a relative ( thro bank legally ), who can deposit in FD & the interest earned may not be added to the donor as per yr reply.
---Yeah, one can do this. But please note that some relations are out of this purview, like husband-wife, parents in law to daughter in law. So should know the relatives included.

And the one who receives the Gift, wants to return it after some years, what happens to the interest earned from Tax angle.
--- As said gifts are non returnable. Nothing particular for interest also. Its receivers income.

Will the Gift returned will be treated as other income to the original donor & taxed or it will be treated as gift only.
--- Not applicable, as gifts are not returnable.

Also, if the receiver of gift is Not an assesse, should she/he file return to show the gift , even though the interest may be less than taxable limit.
--- Not necessary to file ITR. But it is always good to file ITR if the amount involved is big.


Above are replies, to best of my knowledge. I may add that I am not a CA or tax consultant. So it will be good if you consult a CA as there may be some finer prints (as IT rules are full of ifs and buts), that I may not be knowing.
OR
member canikhil clarifies, if something wrong here.

 

[rangarajan]

Thank you Traderniftybank

 

[canikhil]

Suppose, the receiver of Gift wants to return this Gifted cash amount ( above 50k ) after some yrs, is it prudent to take it as Gift ( Thro bank only ) or as loan to be returned with interest later if situation warrants.
---Gifts are non returnable. Though one can make a gift to other side.

Is there any stipulated holding period for Gift taken.
--- No. its your money now.

Why i am asking this is, any one with extra income can give the amount as gift to a relative ( thro bank legally ), who can deposit in FD & the interest earned may not be added to the donor as per yr reply.
---Yeah, one can do this. But please note that some relations are out of this purview, like husband-wife, parents in law to daughter in law. So should know the relatives included.

And the one who receives the Gift, wants to return it after some years, what happens to the interest earned from Tax angle.
--- As said gifts are non returnable. Nothing particular for interest also. Its receivers income.

Will the Gift returned will be treated as other income to the original donor & taxed or it will be treated as gift only.
--- Not applicable, as gifts are not returnable.

Also, if the receiver of gift is Not an assesse, should she/he file return to show the gift , even though the interest may be less than taxable limit.
--- Not necessary to file ITR. But it is always good to file ITR if the amount involved is big.


Above are replies, to best of my knowledge. I may add that I am not a CA or tax consultant. So it will be good if you consult a CA as there may be some finer prints (as IT rules are full of ifs and buts), that I may not be knowing.
OR
member canikhil clarifies, if something wrong here.

Just one addition...it is possible that while the recipient of the gift doesn't have to pay any tax as the relative who gave the gift was covered under the definition of relative, the return gift may be still be taxable as often the reverse relationship is not covered under the definition