Any Spot Forex trader from Mumbai?

[Galts Gulch]

Where did you get this from ?

Tax has nothing to do with where you get your withdrawals.

It has everything to do with your resident status, if you're status is of resident your global earnings are subject to taxation.

If you're non-resident then your foreign earnings are non taxable but your Indian earnings are still taxable.

It doesn't matter where you get the withdrawals to whether you put in a bank in India, outside India, under your mattress whatever.

My question is if you're status is non resident but you trade forex from india (with an overseas broker) is that profit taxable?

Is this income classified as Indian earnings (because you are in India or is it considered foreign earnings because broker is abroad)

If it is classified as "earnings in India" then it is taxable & I have to pay tax even if I have NRI status if it is classified as "earnings outside India" then it is exempt from taxation because of NRI status

In your post, that I answered for, I took it granted for that you are an NRI ...
Any tax law, as you rightly said, is always for local residents ... as the rule of the motherland will apply for all taxation matters.

If you make any investments in India, say real estate and you make profit or earn by renting it out, that will be considered as Indian earnings.

As, a trader can trade from anywhere in the world, withdrawals can happen only in the country that he opened the account from. Broker's physical status does not matter at all. If you open an account with, say FX CM (UK based), giving UK address proof and a UK bank account number, all your withdrawals will happen only to the bank account held in UK. If you have to change your bank account details, you have to furnish new address proof and a new account held in the new country. Most of the brokers comply with international Anti Money Laundering act ... In short, You are taxable depending your resident status and where your earnings come from, not where you trade from ...

Hope it helps ...

 

[Galts Gulch]

in the course of this thread read somewhere about this Lite Forex broker, never heard of them so decided to do a search.

First thing that pops up is

" 2014-09-21
Special Notes:

CAUTION: LiteForex has a policy limiting a trader's profits on news events and gap openings. This rule is currently listed as item 6.8 here.

SCAM CONFIRMATION

September 17, 2013: There are now 4 FPA Traders Court Guilty verdicts against LiteForex. The FPA now considers LiteForex to be a scam.

LiteForex is blacklisted. The FPA recommends AGAINST opening accounts with LiteForex. If you have an account with LiteForex, we recommend you withdraw your money as quickly as possible."

Taken from here ---> http://www.forexpeacearmy.com/public/review/www.liteforex.com

I have no interest in LiteForex even if they gave me a free bonus and this doesn't necessarily mean they are a absolute scam but the chances are high.

Urge members to please do their own research and not believe anyone (including me) before making any decisions, afterall it is your hard earned money not mine.

It is like a criminal calling some one else as criminal ...

http://www.forexfactory.com/showthread.php?t=241869

https://answers.yahoo.com/question/index?qid=20071228203505AAlJyT7

http://www.gcitrading.com/old/gci-financial-review.htm

http://www.moneymakergroup.com/Forexpeacearmy-Scam-Warni-t193018.html&p=4794818

And before some one starts aiming their gun on me "I'm neither on the pay roll of Lite Forex or any other broker in any financial capacity ... With all the brokers, I'm just a trader ... Nothing more ... Nothing less"

I agree with you with the fact that One has to their own home work ... Not just in Fx ... but in all that one does ... :thumb::thumb::thumb:

 

[aryabhatta]

In your post, that I answered for, I took it granted for that you are an NRI ...
Any tax law, as you rightly said, is always for local residents ... as the rule of the motherland will apply for all taxation matters.

If you make any investments in India, say real estate and you make profit or earn by renting it out, that will be considered as Indian earnings.

As, a trader can trade from anywhere in the world, withdrawals can happen only in the country that he opened the account from. Broker's physical status does not matter at all. If you open an account with, say FX CM (UK based), giving UK address proof and a UK bank account number, all your withdrawals will happen only to the bank account held in UK. If you have to change your bank account details, you have to furnish new address proof and a new account held in the new country. Most of the brokers comply with international Anti Money Laundering act ... In short, You are taxable depending your resident status and where your earnings come from, not where you trade from ...

Hope it helps ...

Yes I am an NRI for the last financial year & hope to also make it this year also.

NRI does not necessarily mean you are a foreign citizen, you could be an Indian citizen as well, it basically depends on how many days you spend outside the country ....

Tax laws are for local residents as well as non-residents who are citizens as well as foreign citizens who reside in India ..... its not just for local residents.

You said "In short, You are taxable depending on your resident status and where your earnings come from, not where you trade from ..."

As I said earlier this is logical reasoning but unfortunately its not that clear cut or mentioned anywhere.

As far as trading is concerned if you trade forex from India even if your have NRI status it can still be considered income earned from India because you are physically in India when the income is earned although your broker may be abroad.

It seems it depends on the interpretation of the assessing officer, and I do not wish to take that chance & am looking for specific regulations.

So for eg lets say you stay out of India & trade 1st April ~ 31st Dec and trade forex, you acquire NRI status and your profits are exempt from tax you withdraw your profits to India or anywhere (as I said where you withdraw profits has nothing to do with taxation). Lets assume I withdraw my profits to SBI NRE a/c this income will not be taxed neither will the interest earned on the a/c be taxed.

Then you return to India & trade forex from India with an overseas broker from 1st Jan ~ 31st March. Logically this income should not be taxable but as I said it depends on the interpretation of the A/O therfore I am looking for specific regulations to argue my case just in case I get stuck under the scanner of the IT dept.

Once again I am looking for specific regulations not general logical reasoning ..... thx.

 

[Galts Gulch]

Yes I am an NRI for the last financial year & hope to also make it this year also.

NRI does not necessarily mean you are a foreign citizen, you could be an Indian citizen as well, it basically depends on how many days you spend outside the country ....

Tax laws are for local residents as well as non-residents who are citizens as well as foreign citizens who reside in India ..... its not just for local residents.

You said "In short, You are taxable depending on your resident status and where your earnings come from, not where you trade from ..."

As I said earlier this is logical reasoning but unfortunately its not that clear cut or mentioned anywhere.

As far as trading is concerned if you trade forex from India even if your have NRI status it can still be considered income earned from India because you are physically in India when the income is earned although your broker may be abroad.

It seems it depends on the interpretation of the assessing officer, and I do not wish to take that chance & am looking for specific regulations.

So for eg lets say you stay out of India & trade 1st April ~ 31st Dec and trade forex, you acquire NRI status and your profits are exempt from tax you withdraw your profits to India or anywhere (as I said where you withdraw profits has nothing to do with taxation). Lets assume I withdraw my profits to SBI NRE a/c this income will not be taxed neither will the interest earned on the a/c be taxed.

Then you return to India & trade forex from India with an overseas broker from 1st Jan ~ 31st March. Logically this income should not be taxable but as I said it depends on the interpretation of the A/O therfore I am looking for specific regulations to argue my case just in case I get stuck under the scanner of the IT dept.

Once again I am looking for specific regulations not general logical reasoning ..... thx.

I'm neither giving logical or vague interpretation ... This is how it works and you can get in touch with my auditor, if needed be ... He used to be an auditor for a FX Broker in US before he set up his office in India. He knows rules of both the countries ...

If you, fund your trading account while you are in India (thereby converting Re in to $) and then you trade ... Where ever you trade from ... the income will be considered as income generated from a Investment source in / from India ...
But if you fund your account, while you are abroad (wherein you are not converting Re in to $) and trade, again from where ever you trade, it will not be considered as an Income from an Investment in / from India ... I know it is little tricky ... little complex ... But this is how it works ....

In spirit, RBI does not want to lose its fx reserves as it happens if and when an Indian converts Re in to $ to trade FX and loses that investment ...

 

[aryabhatta]

I'm neither giving logical or vague interpretation ... This is how it works and you can get in touch with my auditor, if needed be ... He used to be an auditor for a FX Broker in US before he set up his office in India. He knows rules of both the countries ...

If you, fund your trading account while you are in India (thereby converting Re in to $) and then you trade ... Where ever you trade from ... the income will be considered as income generated from a Investment source in / from India ...
But if you fund your account, while you are abroad (wherein you are not converting Re in to $) and trade, again from where ever you trade, it will not be considered as an Income from an Investment in / from India ... I know it is little tricky ... little complex ... But this is how it works ....

In spirit, RBI does not want to lose its fx reserves as it happens if and when an Indian converts Re in to $ to trade FX and loses that investment ...

Getting in touch with your auditor is of little use I know several CA's who have practiced for years both in india & abroad, there are 101 CA's who will take money and file returns saying "koi problem nahi saab ...hum sab sambhal lenge"

I need to know the specific rule i can not take a chance & file a return based on what the CA says if by chance my papers are pulled I am responsible not my auditor and I do not want to pay bribes or break the rules.

Case in point, years ago when alpari opened their office in India (Mumbai)I spoke to them in detail about the legality, when I showed them the rules like you they said, "not to worry sir this is how it works, RBI intends this and that and we have consulted top legal experts before spending so much money setting up the business"

couple of years later they shut down FX trading for Indian clients, when I phoned them again to ask what happened the manager who gave me all that BS explanation without any specific rules was long gone and his replacement said "yes FX trading not allowed for resident Indians"

I don't know what your auditor told you but funding your account when I am in India converting Rs to USD does not mean it is taxable. It is taxable only for resident accounts not for NRE accounts. NRE accounts are also in Rs but freely repatriable

I appreciate your advice but if you are not aware of any specific rule that is fine, generalities are of no use to me, I've been doing this long enough to know what information is clear cut dependable and what is not.

 

[Saiyyed Rafik]

Please don't use Credit cards or any electronic medium like paypal/money bookers. your card and paypal a/c will be blocked.

Just a warning, do not listen to people who say otherwise , you will get into a lot of trouble. Banks and RBI are now watching a/c's that trade FOREX closely.

I don't thing so that there is any problem with MB or Netteler as Those website cant asked for PANCARD

 

[shad4u2]

Hi there.

As i know we cant use our CC account for Forex trading but i want to get a mentor ship and his charge is 1$ for demo and after demo it will charge 97$ par month can i use my CC card for purchasing it ? Please suggest me i am little confuse.
Note: As per the payment gateway it shows ''Your secure purchase will appear on your credit card statement as "SUPPORT.SAFECART.COM"
Here is the payment link
https://safecart.com/fxknights/fxk3-fp1/fxk-tr-7

 

[Galts Gulch]

Hi there.

As i know we cant use our CC account for Forex trading but i want to get a mentor ship and his charge is 1$ for demo and after demo it will charge 97$ par month can i use my CC card for purchasing it ? Please suggest me i am little confuse.
Note: As per the payment gateway it shows ''Your secure purchase will appear on your credit card statement as "SUPPORT.SAFECART.COM"
Here is the payment link
https://safecart.com/fxknights/fxk3-fp1/fxk-tr-7

Legally, you are safe ... NO DOUBT ... But ...
Not sure if it is worth the amount ...

 

[shad4u2]

Legally, you are safe ... NO DOUBT ... But ...
Not sure if it is worth the amount ...

Thank you Galts Gulch..... 1$ is not the big amount let me check and share the results here Happy trading

 

[Galts Gulch]

Thank you Galts Gulch..... 1$ is not the big amount let me check and share the results here Happy trading

I spoke about 97$ / month ... not 1$ for demo ...