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#2
1st March 2006, 07:58 PM
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Re: tax on derivatives ?
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The rates are: Upto Rs. 1 lac -- Zero Rs. 1-1.5 lacs -- 10% Rs. 1.5-2.5 Lacs -- 20% Above Rs. 2.5 Lacs -- 30%. However, you can claim a deduction of Maximum Rs. 1 lac u/s. 80C if you invest in specified instruments like ELSS, PPF, NSC, Bank Deposit (from A. Y. 2007-08), insurance premium etc. Besides, you will be required to pay a surcharge of 10% if your net profit exceeds Rs. 10 lacs. However, you can claim a rebate from Income Tax u/s. 88E to the extent of STT paid by you on derivatives transactions. Best Regards, 
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#4
8th March 2006, 11:05 PM
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Re: tax on derivatives ?
HI,
If I have both derivative and cash profit,then what will be the tax? If we don't have taxable income, is STT refundable? Is return mandatory for those who have pan card and no taxable income? How we can file a return and what is the date for filing return, what are the documents needed as proof?(Is it a prin out (inkjet or laser?)of digital cotract note?) thanks
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#5
8th March 2006, 11:42 PM
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Re: tax on derivatives ?
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2. STT is not refundable. Rebate is allowed u/s. 80E only to the extent of taxable income. 3. Return is not mandatory for persons having PAN card. But the ITO may ask any person any person to file a return of his income and then he'll have to abide by the order. Persons with PAN card who haven't file returns provide a good database to the ITOs in this regard. Hence, from a practical point of view, tax consultants ask persons with PAN cards to file return w/o fail. 4. You can file a return by filling up th Saral form. Filing date is 31st july if you are a salaried person or if your business income is not subject to any kind of audit. In all other cases, the due date is 31st October. 5. Usually the documents to be attached are a P&L Account, Balance sheet, and documents supporting claims for deductions. As attaching all the contract notes will be very bulky, you can take an yearly statement of STT paid from broker and attach that. Hope your doubts are clear. Best Reagrds,
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#6
9th March 2006, 11:24 PM
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Re: tax on derivatives ?
Thank you aca trader!
some more question please,is there any need to take print out of the digital contract note and kepp it in our file?If it is in broker's site is it will be deleted later? If i have no other income than those from trading and also the income falls below taxable limit,then is there any need to make p&l accounts ..etc? If yes can we do it ourself or any Charterd accountant to be contacted? again if my income from trading crosses taxable limit,is there any audit to be done?(is there any limit for income for compulsory audit or induviduals having income only from trading need to conduct audit?) Once again thanks for your reply 
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#7
9th March 2006, 11:52 PM
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Re: tax on derivatives ?
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1. It's a good practise to have your own records. The online records may not be maintained by the broker after a particular time. It will always depend upon broker's practise. 2. If you will be filing a loss return, you will need to prepare a P&L account. If you decide not to file a return at all, no need to prepare a P&L account. 2. Well, if you can preapre P&L accounts etc. no need to take help of anybody. 3. If the receipts or turnover from tading is more than 40 lacs, tax audit will be a must. No need to say thanks btw, I am just trying to contribute in the manner I can. Best Regards, --Ashish Last edited by aca_trader; 10th March 2006 at 12:01 AM.
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#8
10th March 2006, 08:57 AM
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Re: tax on derivatives ?
Hi aca trader,
I am a stock trader. I trade mostly in futures. I would like to know how the turnover is calculated. Some auditors who I know, say the government has not defined the definition of tax audit in respect of futures and options trading. Even if you trade a few times in a month, at the end of the year it will cross 40 lacks which is the limit for tax audit. Some is of the openion the sum of profit and loss may be taken as turnover since futures and options is not an asset which can be transfered like share certificates. Can you please suggest how it can be calculated? I would like to know how other traders are filing if you know about it. Thanking you in advance gvnarendra
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#9
10th March 2006, 03:55 PM
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Re: tax on derivatives ?
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I was expecting this question. Well, in the beginning, there was a confusion as to which method to apply for calculating turnover for the purpose of Tax Audit. In July 2005, ICAI came up with the revised Guidance Note on Tax Audit. As per the guidance note, Turnover of F&O Trade will be equal to the difference between total buy and total sale amount. Tax audit will be applicable only if this Difference is greater than Rs. 40 lacs. Best Regards, --Ashish
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#10
10th March 2006, 04:22 PM
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Re: tax on derivatives ?
Quote:
gvanarendra
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