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TraderRavi

low risk profile
bhai log,





so the turnover means TOTAL profit + TOTAL loss and nothing to do with the daily buy and sell turnover. Because nifty future overtrading may lead to 1 crore transaction (in buy and sell turnover) in few weeks easily.

kindly tell me whether my understanding is oky !?

and what are the Tips/ideas for new tax filers for derivative traders.



with cheers,
narayan.
yes yes ...........turnover means TOTAL profit + TOTAL loss
 
bhai log,





so the turnover means TOTAL profit + TOTAL loss and nothing to do with the daily buy and sell turnover. Because nifty future overtrading may lead to 1 crore transaction (in buy and sell turnover) in few weeks easily.

kindly tell me whether my understanding is oky !?

and what are the Tips/ideas for new tax filers for derivative traders.



with cheers,
narayan.

Your derivatives turnover is calculated on the basis of the loss or profit you make per trade. The value of the underlying security has no relevance whatsoever.
You buy for 1 Crore, sell for 1 Crore 100, your turnover is 100 only
This has been made clear several times in this thread. If you keep repeating this question, the answer will remain the same.

However, in case you are doing equity trading also and showing that as business income, then in equity portion, the total value of the sale of the equity is calculated for deriving at the turnover and not only the profit or loss

However, you should take care to calculate the profit/loss based on FIFO and not any other method ( FIFO -First In First Out)
My tip to a new IT filer is to declare all your trades and profit/loss truthfully after maintaining them in an Excel sheet based on FIFO
 
Last edited:

poortrader

Well-Known Member
However, in case you are doing equity trading also and showing that as business income, then in equity portion, the total value of the sale of the equity is calculated for deriving at the turnover and not only the profit or loss

However, you should take care to calculate the profit/loss based on FIFO and not any other method ( FIFO -First In First Out)
My tip to a new IT filer is to declare all your trades and profit/loss truthfully after maintaining them in an Excel sheet based on FIFO
You mean instead of short term capital gain if we are showing as business income then the clause applies? Can you give an example.

Also intraday turnover (equity intraday) is speculative and based on same rules as derivatives?
 
You mean instead of short term capital gain if we are showing as business income then the clause applies? Can you give an example.

Also intraday turnover (equity intraday) is speculative and based on same rules as derivatives?
If you are showing equity trading as business income, then if you say buy Infy 100 shares @ 3000 and sell it at 3300 in less then an year then your turnover is 3.30 lacs and your profit is 30k which will be added 100% to your income and taxed according to the slab you fall in

Speculative turnover is not added to your derivatives or equity turnover no matter how much you do.
However speculation losses cannot be adjusted against any other income except speculation income.
The profits will however be added to your total income and taxed according to the slab you fall in
 

poortrader

Well-Known Member
If you are showing equity trading as business income, then if you say buy Infy 100 shares @ 3000 and sell it at 3300 in less then an year then your turnover is 3.30 lacs and your profit is 30k which will be added 100% to your income and taxed according to the slab you fall in

Speculative turnover is not added to your derivatives or equity turnover no matter how much you do.
However speculation losses cannot be adjusted against any other income except speculation income.
The profits will however be added to your total income and taxed according to the slab you fall in
a) So in Infy example turnover is 330000+30000 (profit)= 360000; right?
b) speculation turnover maybe 1 crore but not added to this 360000; however if speculation profit is 1000 then added to toal income , meaning added to 30k of infy. is my understanding right?
 

a1b1trader

Well-Known Member
a) So in Infy example turnover is 330000+30000 (profit)= 360000; right?
b) speculation turnover maybe 1 crore but not added to this 360000; however if speculation profit is 1000 then added to toal income , meaning added to 30k of infy. is my understanding right?
In INFY example turnover is 330000.
BTW this amount already includes the profit amount.
 
I did some trading in FY 2009-10 in my father account who is senior citizen, my father got the Income Tax notice as he didn't file IT return & they got share transaction of Rs.20000 or more. Though I replied as there is no taxable income so no return filled. Anything further enquired with anyone in such resent notice to anyone. Actually I didn't kept any records of such share transaction & the share account is already closed in 2011.
 
Hi
If you have genuine losses for the concerned years, you have nothing to worry.
There is no word like "I think" where income tax is concerned
You have traded intraday only in equities or derivatives also?
If you have traded only in equity and have never done any derivative trade whatsoever, you are not required to do any tax audit.
Please be sure what you say because derivative trades even if squared up same day do not qualify as intraday trades and come under the head of business income.
My advice is you submit your return for the relevant years to the ITO office from which you have received the notice ,together with a statement showing the Date, Script, Qty, Purchase rate, sale rate Brokerage paid, Nett profit or loss and prove that you had a loss all these years.
As such the 1st thing you should do is dig up all the contract notes for all these years, arrange them date wise to ensure none are missing and then prepare the statement in Excel with the columns as suggested above for each financial year separately
Please also take care to disclose your total income from all sources in the returns and not only the stock market trades portion
You can also enclose the xerox copies of the contract notes to prove your claim

In future it is advised that if you trade in the stock market and even if have losses in the trades, you should submit your return
Shravan- clarity required on your response highlighted in blue above.
Is Derivative trades audit must, irrespective of turnover?
 

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