Starting a Share Trading Company

#1
Friends ,

I will start trading with 30 lac account mostly in futures and Option . Iam pretty sure I will make 25 % consistently every month as I have experience handling 10 lac account with similar returns .Iam currently doing trading in my wife's account and don't want to mix it up with my income .

It is almost 30 % that goes as tax . Is there any benefit if I start a company with my immediate family members with this capital which is into the business of only trading .i need to know the tax implications when trading under a registered company . Do I need to open an office and have few employees .Should I take money from the company as monthly salary and dividend ? Iam confused on all these aspects .

Your response is greatly appreciated

Regards
 

canikhil

Well-Known Member
#2
Friends ,

I will start trading with 30 lac account mostly in futures and Option . Iam pretty sure I will make 25 % consistently every month as I have experience handling 10 lac account with similar returns .Iam currently doing trading in my wife's account and don't want to mix it up with my income .

It is almost 30 % that goes as tax . Is there any benefit if I start a company with my immediate family members with this capital which is into the business of only trading .i need to know the tax implications when trading under a registered company . Do I need to open an office and have few employees .Should I take money from the company as monthly salary and dividend ? Iam confused on all these aspects .

Your response is greatly appreciated

Regards
Kindly continue trading in your or your wife's account. No benefit of incorporating a company or LLP etc.
 
#3
Friends ,

I will start trading with 30 lac account mostly in futures and Option . Iam pretty sure I will make 25 % consistently every month as I have experience handling 10 lac account with similar returns .Iam currently doing trading in my wife's account and don't want to mix it up with my income .

It is almost 30 % that goes as tax . Is there any benefit if I start a company with my immediate family members with this capital which is into the business of only trading .i need to know the tax implications when trading under a registered company . Do I need to open an office and have few employees .Should I take money from the company as monthly salary and dividend ? Iam confused on all these aspects .

Your response is greatly appreciated

Regards
Hi,

Only benefit which I can see is that you will be able to deduct expenses from the profit before paying the tax. Individually you are paying expenses after the tax. Here it is also possible that you are paying profit to partner/owner which can be tax free income as firm has paid tax.
Forming a company/firm will attract a flat tax rate at the higher end maybe more than personal.
Besides this, maybe a CA can guide you better.
 

canikhil

Well-Known Member
#4
Hi,

Only benefit which I can see is that you will be able to deduct expenses from the profit before paying the tax. Individually you are paying expenses after the tax. Here it is also possible that you are paying profit to partner/owner which can be tax free income as firm has paid tax.
Forming a company/firm will attract a flat tax rate at the higher end maybe more than personal.
Besides this, maybe a CA can guide you better.
even the firms pay tax on flat tax rate. So no benefit in shifting to the firm. And there is no expense that an individual cannot claim but the company can. All you need to do is to apply for broking account as a trader instead of individual (investor)
 
#5
even the firms pay tax on flat tax rate. So no benefit in shifting to the firm. And there is no expense that an individual cannot claim but the company can. All you need to do is to apply for broking account as a trader instead of individual (investor)
Hi

Thanks for the info.. What do you mean by booking account as trader and with whom should I open . Can you let me know if there are any benefits by opening this ..

Thanks
 
#6
Friends ,

I will start trading with 30 lac account mostly in futures and Option . Iam pretty sure I will make 25 % consistently every month as I have experience handling 10 lac account with similar returns .Iam currently doing trading in my wife's account and don't want to mix it up with my income .

It is almost 30 % that goes as tax . Is there any benefit if I start a company with my immediate family members with this capital which is into the business of only trading .i need to know the tax implications when trading under a registered company . Do I need to open an office and have few employees .Should I take money from the company as monthly salary and dividend ? Iam confused on all these aspects .

Your response is greatly appreciated

Regards
A great profit percentage per month!!!! 25% per month.

Open a trading company- either proprietor or partnership. (Proprietor company name should sound like a professional company - eg. XYZ financial services etc) Many times , IT officer disallows up to 50% expenses for INDIVIDUAL TRADER, saying all expenses not related to trading. In company such questions do not arise. It is easier to claim depreciation in a company wrt to claiming depreciation in individual IT file.

From tax percentage point, individual and company - both is same.

Sahen
 

Blackhole

Well-Known Member
#7
amazing return on investment!

hope u soon float some fund and we traderji members can be a part of it?

well yes even propriety firms would do, u can claim for rent,internet,electricity,phone bills,backup power and internet, additional machines or other trading related instruments,depreciation on all the assets,data vendors other office expenses and salaries to all the individuals if any, like operator,analysts,offce boy, benefits to employess as expenses, auditing cost can increase(depends on ca).,etc,,,,just few pointers/ ideas....


a lot can be done and claimed whereas in some case that can be denied. Just check for HUF as well that can help. JUst discuss with CA who is managing ur taxation.

Get certified if not, that might help in long run(for algo trading,dealer terminal etc)

Remember one thing, everybody looses in market, only those who learn the art of loosing money survives in longer run. Loose well and earn big. I had read somewhere that trading is a hardest way to earn easy money.

Happy trading.
 
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#8
amazing return on investment!

hope u soon float some fund and we traderji members can be a part of it?

well yes even propriety firms would do, u can claim for rent,internet,electricity,phone bills,backup power and internet, additional machines or other trading related instruments,depreciation on all the assets,data vendors other office expenses and salaries to all the individuals if any, like operator,analysts,offce boy, benefits to employess as expenses, auditing cost can increase(depends on ca).,etc,,,,just few pointers/ ideas....


a lot can be done and claimed whereas in some case that can be denied. Just check for HUF as well that can help. JUst discuss with CA who is managing ur taxation.

Get certified if not, that might help in long run(for algo trading,dealer terminal etc)

Remember one thing, everybody looses in market, only those who learn the art of loosing money survives in longer run. Loose well and earn big. I had read somewhere that trading is a hardest way to earn easy money.

Happy trading.
Thanks for the information .

As far as my trading goes , I trade only in F & O and never bought any shares in my life .As you rightly pointed , loss is something that you should be happy to take and you should love to take it . There were periods where I used to double my money every month for continuous 6 months. To get this rate of return you need to take huge risk and some time a single loss will take you out of the game and this shakes your confidence to the core and doubts your capability . In the last 1.5 years I toned down my approach and have expectation of only 25-30 % a month and Iam able to get this consistently . Earlier I would expect the price to go up 10 % every time and now I just come out when it makes 3-4 % . I focus only on stocks that are about to explode based on chart pattern .
 
#9
The answers are probably complicated. Old fart could be right, you need to be registered to buy or sell for someone. But, it might be different if you are doing the trading from their individual accounts. You would probably be best off talking to a CPA they can help set it all up and tell you what is legal and what isn't.
 

canikhil

Well-Known Member
#10
Hi

Thanks for the info.. What do you mean by booking account as trader and with whom should I open . Can you let me know if there are any benefits by opening this ..

Thanks
I meant when you are filling up the account opening form, in KYC details provide your business as Share/Derivative trading.
 

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