Clarification needed Trading income taxation for senior citizens

#1
If a senior citizen wishing to make some money from market what is the taxation involved for a trader (short term gains Vs Business income) ?

1. If say he trades once every 2-3 months and rotates say 3-4 lakhs ?

2. If say he trades every month and rotates 1 lakh or so ? ?

3. Main doubt is to know if tax will be at 15% as short term gain or 33% for above?

4. Also if tax profile is declared as 'Trader' do dividends get taxed as per slab ?

5. Further to above question, jout of curiosity, Rakhesh Jhunjhunwala and few others are renowned as 'INVESTOR'. He would be getting for all the lakhs of shares he owns lakhs of rupees as dividends. So, all the dividend amount would be tax free ?
 

Xitij

Active Member
#2
If a senior citizen wishing to make some money from market what is the taxation involved for a trader (short term gains Vs Business income) ?

1. If say he trades once every 2-3 months and rotates say 3-4 lakhs ?

2. If say he trades every month and rotates 1 lakh or so ? ?

3. Main doubt is to know if tax will be at 15% as short term gain or 33% for above?

4. Also if tax profile is declared as 'Trader' do dividends get taxed as per slab ?

5. Further to above question, jout of curiosity, Rakhesh Jhunjhunwala and few others are renowned as 'INVESTOR'. He would be getting for all the lakhs of shares he owns lakhs of rupees as dividends. So, all the dividend amount would be tax free ?
Point 1 & 2 : The tax will depend on the Profit generated from these 'rotations'?
Point 3 : Again, you need to specify the Income level to get a proper reply. The initial 2.5L is exempted for senior citizens.
Dividends are exempted from Tax upto any amount. There is a simple rider that you must hold the shares for minimum 3 months. This is just to avoid "dividend stripping" !
BTW : Dividend to people like RJ must run into crores !! :p

ps.: I am a senior citizen and my replies are based on my experience and may not be 100% accurate.
 
#3
Point 1 & 2 : The tax will depend on the Profit generated from these 'rotations'?
Point 3 : Again, you need to specify the Income level to get a proper reply. The initial 2.5L is exempted for senior citizens.
Dividends are exempted from Tax upto any amount. There is a simple rider that you must hold the shares for minimum 3 months. This is just to avoid "dividend stripping" !
BTW : Dividend to people like RJ must run into crores !! :p

ps.: I am a senior citizen and my replies are based on my experience and may not be 100% accurate.
Hi PCJ, thanks for your reply. I will share this with senior citizens I am trying to help out..

I will summarize my understanding as below then:
1. Upto 2.5 Lakhs income exempted including any short term gains as well
2. Dividends are tax free in all cases...investor or a trader

I will then rephrase my question 3 as below :

In case say 4 lakhs is rotated say some 20 times in an year and makes a short gain of say 4 Lakhs, then
a. Upto 2.5 lakhs income is exempt?
b. For remaining income of say 1.5 lakhs , will the tax be at 15% treated as short terms gain or will it be at 33% with them being treated as a trader based on number of transactions or the overall high amount transacted in the year?

Thank You,
 

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