F&O : How to show in returns

[optionerd]

Dear Friends,

I am having a taxable income from Salary and FDs.

Now, I have incurred a loss in F&O. I was told that we should declare that so that it can be offset in next year returns ( if you manage to make some money next year).

However, I have the following questions

1) Where should we show losses/Profilts in F&O ( I was told that it cannot be LT or ST Capital gains as there is no delivery)?? Please mention the Head for this tax and also what section of the Saral form we should use to fill this?

2) How much Tax we need to pay?? Is it dependect on other sources of income or we just need to pay 33%??

Please help.

 

[NiftyFantasy]

Dear Friends,

I am having a taxable income from Salary and FDs.

Now, I have incurred a loss in F&O. I was told that we should declare that so that it can be offset in next year returns ( if you manage to make some money next year).

However, I have the following questions

1) Where should we show losses/Profilts in F&O ( I was told that it cannot be LT or ST Capital gains as there is no delivery)?? Please mention the Head for this tax and also what section of the Saral form we should use to fill this?

2) How much Tax we need to pay?? Is it dependect on other sources of income or we just need to pay 33%??

Please help.

You will have to use ITR4 for the return, and it will be shown as income from business or profession. You can also deduct some expenses from your profit i.e. electricity bill,internet exps,telephone exps,conveyance if your profit is big then you can also show some salary payment to hired employee and show that he is placing orders etc. on your behalf and you are paying a salary for the same.... it all depends on how much you are earning...

business losses can be carried forward to next year ( i think upto several years not sure..about exact years)

net profit (after deduction of exps) will be added in your salary+fdr int. and then you will pay the rate on which you total income falls... can be 10/20 or 30% depends on your total income

 

[optionerd]

Thanks, sir.

Your explanation is quite clear.

 

[columbus]

business losses can be carried forward to next year ( i think upto several years not sure..about exact years)

I think we can carry forward the losses to 8 years ,provided Returns are
filled within the each financial year in scheduled date.Let us throw the question to our in-house Tax expert,Diosys.

 

[SCIFIGIRI]

I am trying to fill ITR 4 online. Can someone help which Schedules / Sections I have to fill considering

1. Employed with TDS
2. Loss fom F&O and want to carry forward the losses
3. Interest from Savings Account

Also which Nature of Business I have to select for F&O trading?

Thanks in Advance

 

[record]

Hi
I am not trading F&O but I am training intraday & delivery got loss. I am also salaried person and repaying Housing Loan EMI.
Do I need to file ITR4 OR ITR4S or ITR2?

Also can I add Trading & demat account opening, annual maintainance, STT and other charges in my loss?

Thanks in advance

You will have to use ITR4 for the return, and it will be shown as income from business or profession. You can also deduct some expenses from your profit i.e. electricity bill,internet exps,telephone exps,conveyance if your profit is big then you can also show some salary payment to hired employee and show that he is placing orders etc. on your behalf and you are paying a salary for the same.... it all depends on how much you are earning...

business losses can be carried forward to next year ( i think upto several years not sure..about exact years)

net profit (after deduction of exps) will be added in your salary+fdr int. and then you will pay the rate on which you total income falls... can be 10/20 or 30% depends on your total income

 

[sameer7]

I would also like to know how to calculate the gross receipts /turnover in this case which i need to show on the PL sheet of ITR-4 form, in the case of future and options trading.

At one of the links it says -
for the purpose of 44AB , based on the guidance note of ICAI , following items should be considered to constitute turnover

1. The total of positive and negative differences , plus
2. Premium received on sale of options is also to be included in turnover ,plus
3. In respect of any reverse trades entered, the difference thereon

Is this true? I could not understand what is meant by Pt 2 there. Could someone please clarify on an example what is meant by Pt 2.

 

[hemantmandhare]

I think we can carry forward the losses to 8 years ,provided Returns are
filled within the each financial year in scheduled date.Let us throw the question to our in-house Tax expert,Diosys.

My interpretation Regarding Income Tax & Trading.

1. Intraday trading = Business income.
2. Short term delivery (less than 1 year) = Short term capital gain STCG (tax applicable to STCG).
3. Long term delivery (more than 1 year) = Long term capital gain LTCG which is exempt from tax.
4. Dividend from listed equity shares is taxfree (as the co. pays dividend tax.)
5. Derivatives Trading = Business Income (Losses can be carried forward for one year only.)
6. Losses from Equity Trading can be carried forward for 8 years (as per my understanding --> please correct me if i'm wrong.)
7. Commodity trading - I personally think it might be falling in Business catagory as it is also Derivatives trading.

Seniors / experts plz comment as these are important issues for everyone

 

[prabit]

I would also like to know how to calculate the gross receipts /turnover in this case which i need to show on the PL sheet of ITR-4 form, in the case of future and options trading.

At one of the links it says -
for the purpose of 44AB , based on the guidance note of ICAI , following items should be considered to constitute turnover

1. The total of positive and negative differences , plus
2. Premium received on sale of options is also to be included in turnover ,plus
3. In respect of any reverse trades entered, the difference thereon

Is this true? I could not understand what is meant by Pt 2 there. Could someone please clarify on an example what is meant by Pt 2.

Hi, as far as I know Pt 2 for option traders. The price of an option is called 'premium'. So if you sell an option you get a premium.

 

[Ritchie43BD]

Seniors / experts plz comment as these are important issues for everyone