Taxation for Traders / Investors

Bank statement can treats has proof ?
Any other thing which can we used has proof ?

you will have to keep all contract notes, ledger as records.

Further, with regards to treating intra-day as non-speculative as suggested by CArnot, I don't think any Income-tax officer is going to go beyond the clearcut provisions of the Income-tax act. Non-delivery trades will invariably be treated as speculative transactions.

Hi Snake.Head,

After replying to your post, I saw your edited post and hence edited my post.

Please do not take it any other way.

Proof of the pudding lies in eating it -- meaning the tax officer should accept that a person can survive on speculation activity.

You can present your assets and liabilities to her/him, your previous tax records, your personal history records like education, employment etc., your life style pattern records, your expense pattern records, your income pattern records, similar records for your spouse, etc.. may all help to convince the tax officer.

Please do consult a professional CA on this matter.

My views and opinions are for information purpose only.

Enjoy,
CArnot

Hi all,

Too many posts within a short span of time, causing confusion for me due to poor internet connection.

Please let me clearly put down my views -

Gain / loss from speculative activity (equity intra-day or other) can be treated as a business activity and thus business gain / loss hence allowing expense deduction, calculated under the head gain / loss from business or profession and taxed as per regular tax slab.

The above is possible if and only if your main source of income is speculation activity. You will need proof and convince the tax officer of the above possibility.

In absence of above conditions, speculative gain / loss is treated as pure speculation and no deductions are allowed and taxed at 30 %, and thus it is not calculated as regular business income.

Enjoy,
CArnot

any reason/document where you got this 30% flat slab rate on speculative income? I don't recall any specific tax provision for the same.

Intraday trading income(profit or loss)falls under speculation head,but taxed as normal tax slab..

Only income from casino,horse betting,lottery win,profits from Cricket Satta,bet on a street dogs,flying mugans betting taxed at 30%..

Ok,one interesting query Nikhil Sir-
Say,I make 30L profit and I don't pay the tax what will happen? IF I inform IT Dept that I'm not able to find a good CA to file/compute my taxes properly,will they provide me CA?
IS IT Dept really that friendly or all corrupt officers are there?

What I believe is if you face a scrutiny or a raid,no matter how well you managed your all docs properly,you hv to settle a matter by paying a bribe..

ha ha...Income-tax department doesn't run a legal-aid service like Indian courts do. Hiring a CA is not a requirement of law. You are supposed to be liable for your own computations and workings.

with regards to corruption, I don't see any reason to make sweeping comments on the whole department. there are always many good honest officers in the system. People often end up paying bribes because they don't have faith in their own records.

A person earning Rs 30 Lacs profit does not ask these questions.He knows how to go about doing his tax matters and is fully equipped with all data and calculations.

ST

:rofl::lol: