Books of accounts for intraday traders

gambler

Well-Known Member
#1
Hi,
Can anyone inform when an intraday trader is required to maintain books of accounts. Actually i got notice from income tax office and income tax officer told me to show books of accounts for that financial year. I already provided him ledger of broker. Here i want to infom you that my main income is from salary.

That income tax officer told me that he could impose me fine of rs. 1.5 lac for not maintaining books of accounts.

Kindly help regarding this.
 
#5
I'm not an expert but I think a lot of people get notices from IT for various reasons, & it isn't always a cause for concern - https://in.news.yahoo.com/8-common-reasons-getting-income-081200327.html Remember that IT is one of the most corrupt departments since they deal with money, so maybe the officer is trying to scare you to extract money out of you, so I'd suggest you to consult with a decent Chartered Accountant before proceeding.
 

gambler

Well-Known Member
#6
I'm not an expert but I think a lot of people get notices from IT for various reasons, & it isn't always a cause for concern - https://in.news.yahoo.com/8-common-reasons-getting-income-081200327.html Remember that IT is one of the most corrupt departments since they deal with money, so maybe the officer is trying to scare you to extract money out of you, so I'd suggest you to consult with a decent Chartered Accountant before proceeding.
I think you are right. Income tax Officer gave me number of one advocate to consult him. I met him today evening and he told me that i dont need any books of accounts to be maintained. Than i ask him to close this matter/scrutiny. He said that we dont need to pay anything to IT department. But he will charge 15k as his fee to handle this case. May be there will be some cut of IT Officer.

I finally told him that i will do further proceedings myself. Now may be that officer will harass me more in near future.
I already submitted scriptwise profit and loss with IT department that i get from broker. Eventhough he is asking me for books of accounts. Whereas my whole source of income is from salary. Also given them all bank account statement, form 16, ITR COPY.
They are there for harassing only.
 

niftygupshup

Well-Known Member
#7
Hi RS

I may add that I am neither a CA nor a tax consultant, only a trader like you.

Please answer some of the following questions, if it is convenient.

1. For which FY, this IT notice is.
2. Since how long you are trading. I think must be since last few years.
3. You trade (intraday or positional) derivatives (F&O) only or trade equity (intraday) also. I hope you understand the difference of trading derivatives and equity, as per IT.
3. Year wise turnover (of both, if trading both segments, F&O and equity). You said the TO of the year in question is around 24 crores. I hope you know the TO calculation. BTW, if you are right in saying that TO is 24 crores, then you have no option but to take the help of a CA.


You said your main income is from salary, and you are filing ITR.
1. Which ITR, you were filing for last few years.
 
#8
I think you are right. Income tax Officer gave me number of one advocate to consult him. I met him today evening and he told me that i dont need any books of accounts to be maintained. Than i ask him to close this matter/scrutiny. He said that we dont need to pay anything to IT department. But he will charge 15k as his fee to handle this case. May be there will be some cut of IT Officer.

I finally told him that i will do further proceedings myself. Now may be that officer will harass me more in near future.
I already submitted scriptwise profit and loss with IT department that i get from broker. Eventhough he is asking me for books of accounts. Whereas my whole source of income is from salary. Also given them all bank account statement, form 16, ITR COPY.
They are there for harassing only.
This is the unfortunate reality of government departments in India. Maybe you should consult another CA or Advocate & see what he tells you. You can find a lot of CA's & Advocates on Justdial or whatever.

Just to reiterate the point about turnover, I have a hard time believing that your intraday turnover was 24 crores if you are just a regular salaried person. Here's an article explaining how traders are supposed calculate intraday turnover - http://zerodha.com/z-connect/traders-zone/taxation-for-traders/taxation-simplified (I'm not trying to promote Zerodha or anything like that but I think the article is very useful for all of us traders)
 

gambler

Well-Known Member
#9
This is the unfortunate reality of government departments in India. Maybe you should consult another CA or Advocate & see what he tells you. You can find a lot of CA's & Advocates on Justdial or whatever.

Just to reiterate the point about turnover, I have a hard time believing that your intraday turnover was 24 crores if you are just a regular salaried person. Here's an article explaining how traders are supposed calculate intraday turnover - http://zerodha.com/z-connect/traders-zone/taxation-for-traders/taxation-simplified (I'm not trying to promote Zerodha or anything like that but I think the article is very useful for all of us traders)
Had words with one of my known CA regarding this issue. He told me no need to worry as i dont require to maintain any books of accounts.
As i do purely intraday in equity cash. I think for equity cash turnover means profit and loss amount for that particular year. Turnover here should not mean buy value or sell value.
 

gambler

Well-Known Member
#10
Hi RS

I may add that I am neither a CA nor a tax consultant, only a trader like you.

Please answer some of the following questions, if it is convenient.

1. For which FY, this IT notice is.
2. Since how long you are trading. I think must be since last few years.
3. You trade (intraday or positional) derivatives (F&O) only or trade equity (intraday) also. I hope you understand the difference of trading derivatives and equity, as per IT.
3. Year wise turnover (of both, if trading both segments, F&O and equity). You said the TO of the year in question is around 24 crores. I hope you know the TO calculation. BTW, if you are right in saying that TO is 24 crores, then you have no option but to take the help of a CA.


You said your main income is from salary, and you are filing ITR.
1. Which ITR, you were filing for last few years.
I got notice for fy 2013-14 i trade equity cash only and trading since 2008. But got such notice first time.
 

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