taxation of futures and options traders.

TraderRavi

low risk profile
#2
http://www.simpletaxindia.net/2013/06/taxation-of-futures-options-and.html

I stumbled on this useful presentation, people can comment on the validity of the slides.

slide 15: says for FNO trader turnover is his profit/loss. although zerodha takes sum of options sell price as turnover.

If there is some CA around here, please do comment on the presentation.

Thanks.
zerodha takes sum of options sell price as turnover.=> its bad practice , if you have only 20k capital but you scalp options for few points daily , your turnover > 1 crore easily and then audit is necessary , it sud be profit + loss as in futures.
 
#3
If we take sum of total sell price of option then....

Suppose I bot 1 lot (50 units) of call option @ 98 then my CP will be 4900 and I sold @ 100 then my sale price will be 5000. Now assuming 8% profit on the sale price, (so as to avoid audit) I must earn 400 in this trade. That is my sale price must be equal to or above 5400 (not taking into account the expanses on trade) that is 108 per unit.

If this is possible then one will become lakhpati in a few days and crorepati in 9 - 12 months :lol: :lol:

Whosoever has formulated this procedure, must not be aware of the working of option trading :annoyed:
 
#5
Traders must consider Tax Audit as expence of Rs 10,000 to 12000 per annum and maintain books of accounts either in Tally or any other accounting software.This will be required for the purpose of Audit. For members needing tax audit, it is still upto 30 Sept that they have time...so start preparing the books of accounts.

In todays Times of India there is a news item that IT is going after people earning Bank Fixed Deposits interest. Many people dont show bank interest as income...they need to be careful now and declare all heads of income correctly.

Smart_trade
 
#6
Traders must consider Tax Audit as expence of Rs 10,000 to 12000 per annum and maintain books of accounts either in Tally or any other accounting software.This will be required for the purpose of Audit. For members needing tax audit, it is still upto 30 Sept that they have time...so start preparing the books of accounts.

In todays Times of India there is a news item that IT is going after people earning Bank Fixed Deposits interest. Many people dont show bank interest as income...they need to be careful now and declare all heads of income correctly.

Smart_trade
Suppose foreign people from Europe or over sea do open trading accounts in India. Do they face some sort of any kind of tax in India or are there any other obstacles they would face by having a trading account in India?
 
#7
Suppose foreign people from Europe or over sea do open trading accounts in India. Do they face some sort of any kind of tax in India or are there any other obstacles they would face by having a trading account in India?
Foreign nationals individually cannot open a trading account in India, they have to come through Foreign Institutional Investor route, register with SEBI,RBI as a FII...on income earned in India, there is income tax, unless FII is refistered in a country which has avoidence of double taxation treaty with India and the income is taxed in the parent country.

Non resident Indians staying abroad can open a trading account on certain conditions.

The above is based on my knowledge....I could be wrong as FII taxation I have no direct experience.

Smart_trade
 

nirav_j

Well-Known Member
#8
Traders must consider Tax Audit as expence of Rs 10,000 to 12000 per annum and maintain books of accounts either in Tally or any other accounting software.This will be required for the purpose of Audit. For members needing tax audit, it is still upto 30 Sept that they have time...so start preparing the books of accounts.

In todays Times of India there is a news item that IT is going after people earning Bank Fixed Deposits interest. Many people dont show bank interest as income...they need to be careful now and declare all heads of income correctly.

Smart_trade
DTC 2013 had amended the definition of "accountant" from just CAs earlier, to now CAs, CS and CMAs for Audits ...

Good news for retail traders, individuals ... ;)

Such massive competition = price war @ Audit fees ...
 

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