Bakwaas Trading

[Smart_trade]

Hi ST,
Can you elaborate please. My understanding is at the end of the year while computing taxes we can include STT and stamp duty as business expenses. (Provided we file audited report).

Our contracts /bills we get from our broker is net profit/loss after deducting STT,Brokerage,stamp duty ,service tax,exchange charges etc.....so these are already deducted from the gross profit to get net profit or loss for the day.So if you deduct these again at the end of the year, you are deducting these twice.

These are considered as deductible expenses but not as tax credit like TDS or advance tax paid....there is a big difference between the two.

Smart_trade

 

[daytradernifty]

Our contracts /bills we get from our broker is net profit/loss after deducting STT,Brokerage,stamp duty ,service tax,exchange charges etc.....so these are already deducted from the gross profit to get net profit or loss for the day.So if you deduct these again at the end of the year, you are deducting these twice.

These are considered as deductible expenses but not as tax credit like TDS or advance tax paid....there is a big difference between the two.

Smart_trade

Thanks ST , I meant the same.
Provided we are profitable and earn about a 1 lac(assume)
then 30 K will go as taxes.
In that case STT/Stamp paid is 20K
Then we have to pay 10K as tax.
correct ?

 

[Smart_trade]

Thanks ST , I meant the same.
Provided we are profitable and earn about a 1 lac(assume)
then 30 K will go as taxes.
In that case STT/Stamp paid is 20K
Then we have to pay 10K as tax.
correct ?

It depends on how you have arrived Rs 1 L as profit......if you have added net profit and deducted net loss for the full year from our contracts or ledger, then we have already deducted all the charges and we cannot deduct them again....

Hope it is clear now.

ST

 

[daytradernifty]

It depends on how you have arrived Rs 1 L as profit......if you have added net profit and deducted net loss for the full year from our contracts or ledger, then we have already deducted all the charges and we cannot deduct them again....

Hope it is clear now.

ST

Sorry for extending this discussion ST.
Suppose only 1 Trade is made.
Total profit is 1 lac ( That is broker gives back 1 lac to me after deductions).
Stamp duty/STT is 20 K (Broker has already deducted)
Tax payable is 30 K
Then I have to pay 10K as tax correct ?

 

[TracerBullet]

Sorry for extending this discussion ST.
Suppose only 1 Trade is made.
Total profit is 1 lac ( That is broker gives back 1 lac to me after deductions).
Stamp duty/STT is 20 K (Broker has already deducted)
Tax payable is 30 K
Then I have to pay 10K as tax correct ?

20k is part of expense. So if Gross profit (Sell price - Buy price) is 1L then net profit is 80k (-other expenses) and tax is applicable on Net profit. Sadly, You cannot recover STT while paying taxes. But also, You don't have to pay taxes on STT

 

[Smart_trade]

Sorry for extending this discussion ST.
Suppose only 1 Trade is made.
Total profit is 1 lac ( That is broker gives back 1 lac to me after deductions).
Stamp duty/STT is 20 K (Broker has already deducted)
Tax payable is 30 K
Then I have to pay 10K as tax correct ?

No ,tax payable is 30 K if you are in 30 % tax slab.....if you deduct 20 k then you are deducting it twice and considering it as tax credit which is totally wrong.

ST

 

[Smart_trade]

20k is part of expense. So if Gross profit (Sell price - Buy price) is 1L then net profit is 80k (-other expenses) and tax is applicable on Net profit. Sadly, You cannot recover STT while paying taxes. But also, You don't have to pay taxes on STT

He is saying 1 lakh is what broker gave him as credit after deducting STT so it is not gross profit....it is net profit ...gross profit will be Rs 1 lakh plus add back 20 K as STT paid so 1.2 L and from that deduct 20 K as allowable expense on account of STT and taxes so net profit is 1 L......

ST

 

[daytradernifty]

He is saying 1 lakh is what broker gave him as credit after deducting STT so it is not gross profit....it is net profit ...gross profit will be Rs 1 lakh plus add back 20 K as STT paid so 1.2 L and from that deduct 20 K as allowable expense on account of STT and taxes so net profit is 1 L......

ST

Thanks ST..

 

[Sidz]

In case there is net loss, we dont have to pay tax. But is it mandatory to declare losses while filing return?

 

[Hulu Girl]

I have never thoughts that one thread should have name "bakwas". SO who are doing bakwass trading?? Sorry new to a thread so I can not reach out every post of the thread.