Trading in parents name

[Smart_trade]

I dont understand one thing here..he opens trading account in her mom account..

got profit of say 1 Cr..

she is filing ITR 4 and paying tax amount of 30 Lakhs (or something like 25 lakhs after few expenses deduction..)

where is the question of scrutiny or such cases related to IT .............???

Scrutiny can be in case of perfectly legitimate case.....any large profit,large capital gains etc case or any case for that matter can come under scrutiny. If one makes a trading profit of Rs 1 Cr then expect scrutiny irrespective of whether tax is paid correctly or not.Scrutiny does not mean that the assessee has done some hera pheri or IT department suspects some wrong doing....they pick up few random cases every year based on their critaria. So getting a scrutiny is very much normal for large profits,large capital gains,property transactions, large spending etc etc.

Smart_trade

 

[cinderblock]

In India, officially, only 48,000 people earn Rs.1 crore or more. Most of them include CEO and directors whose main source of income is salary.

There would hardly be 100 (if that) taxpayers that make 1 cr. trading / dealing in securities. It's only a handful. Like ST said, expect a scrutiny (100%) if you are making 1 cr trading securities as an individual.

 

[Newbie Day-Trader]

Of course, I'm not a CA or an expert in these matters but maybe you can consider being her "fund manager" or something, & transfer most of the profits to her account & file IT accordingly, & pay a "service fee" of 2-5% or whatever to yourself for your services to her.

 

[Kv19]

If son makes profit in his own account say 15Lk but loss in mother's account say 7lk.. Can we club these two accounts and show only 8lks profit?

 

[copypasteaee]

Trading is not allowed for govt. employees. My father is also an Govt. Employee who is years away from retirement. So i want to open an account in my mothers name(Homemaker, uneducated) and trade Intraday only in that account and will file ITR without fail.
Income, if at all any, will be Gifted/Loaned to me by my mom.

Can that be done? What all legal precautions have to be taken?
Does an IT officer bother about who actually does trading? (If for some unforeseen reasons, IT notice is served OR An IT officer cross examines us)(PS: My mother is uneducated)

My concern is, can IT officer take any legal action on MOM if they are convinced that profits are due to trading by someone else?(Provided no tax has been evaded)

Can they take legal action against me?

Better open a huf account. If your trading in name of your mother is profitable, then she will not be entitled to medical or any other government facilities as she will no longer be dependent on your father.