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FNO loss against salaried income.

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Old 29th May 2009, 08:45 PM
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Default FNO loss against salaried income.

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



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  #2  
Old 31st May 2009, 01:52 PM
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Default Re: FNO loss against salaried income.

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.
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Old 31st May 2009, 03:52 PM
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Default Re: FNO loss against salaried income.

Quote:
Originally Posted by vikram.exe View Post
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
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.
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Old 1st June 2009, 10:02 AM
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Default Re: FNO loss against salaried income.

Thanks aravinthrajm and Hitesh....


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