Fire your tax related queries and i would get it solved!!!
Dear Diosys, Don't worry these are not tax related queries 
Congratulation on 2yrs completion of your thread. It is good to have a tax expert among traders! I feel sorry that you have to answer the same silly questions time and again when they have been clearly explained already. So to prevent myself and new boarders doing so I have read all the 750+ posts in this thread an complied a simple Q&A and a small list of useful tit-bits from your replies. I think there are some issue with them since the tax laws have changed and since you started this thread and I myself didn't understand some of your replies. I request you to please go though it in your free time and update missing or wrong info and after reading it I have a couple of questions to ask.
Q&A:
====
1.I trade in intraday,short term and in F&O,so how to calculate the turnover for each?
A.) Tax audit is to be done when one's turnover is above 40 Lacs...For those in other industry it is the basic sale achieved....But in the case of transactions of F&O there is a difference... For the purpose of F&O transactions the limit of 40 Lacs is the profit or loss in absolute terms...Let me explain with an example....
Suppose you bought one lot of 150 shares of Financial Technology at Rs. 3000...Then you sold it at 3100....Therefore your profit is 100*150=15000...
Now you bought one lot of 1400 shares of HCC at 100 and then sold it for 110...so your profit if 10*1400=15000...
Third, you bought one lot of 8000 shares of IFCI at 60 and then sold it for 50...so you incur a loss of Rs. 10*8000=80000...
therefore for the purpose of determining the total turnover you achieved would be 15000(FTIL profit) + 14000(HCC profit) + 80000(IFCI loss) = 1,19,000.... it would not be the total transaction values but the absolute profit or loss incurred in the transactions...
2.Do i need to maintain any book of accounts,if yes how is that done
A.) Books of accounts are required of the income from business exceeds 1,20,000 so judge from yourself....In any case i suggest maintenance of books.
3.while filing return do i need to submit all the electronic contract notes printouts?
A.) NOTHING is to be attached with your ITR.....absolutely NOTHING
4.how to add this income in my salary income?
A.) Very simple.....simply add both the incomes and then calculate the tax payable on them....
5.when is tax audit applicable in each case that is intraday trading and F&O.
A.) Tax Audit is required when the sale exceeds 40 lacs....determine it according to the formula given to you in the Answer1
Compiled replies:
===============
-Depreciation and costs can be deducted when calculating tax from business income, also payment done to accountant to maintain books
-Capital gains tax is lower than business tax
-Business income is taxed at 30% flat rate
-Individuals are allowed exemption limits but corporates are not
-Tax need not filed if gross income (income before deductions) is less than exemption limit
-Trading income tax filed with ITR3
-If business income then ITR4
-Turnover is more than 40L in business then it is auditable
-If it is auditable then you need to maintain your books
-If income from derivatives then turnover is total profit+total loss (not -loss, +loss) is "used to determine" if auditable
-STCG can't be offset against long term loss but long term gain can be offset agaist STCG
-STCG on equities is 15% (over expemtion) LTCG on equities is nil (LT for equities is 1yr all else it is 3yrs)
-I wonder what happended to the guy who wanted to invest all his life savings in RPL
-Land purchased outside 8km city limit doesn't have to pay CG tax
-A "pure" day trader is taxed at 30% flat rate (incase of a seperate account with investments that it can be filed as CG tax)
-Tax Free: PF, ELSS, Divident on shares and debt funds
-If tax is filed as business then the closing value of your stock can be used to calculate tax (if your stock are work lower than purchase you can save tax on the difference by deducting it from taxable income)
-Loss can be carried over for 4 yrs or 8yrs (need clarification)
-STT is deducted for taxable income under business head (trader). No deduction for investor (STCG/LTCG)
-80C can be used for deduction from business income
-Books of accounts are cash book, day book, ledger and relevant vouchers with their supporting. Tally will do but Excel will not.
-F&O income comes under business income. Here option turnover is the option premium
-Gifted money tax is to be paid by the person who gifts it
-I guess the commodities equivalent of STT, CTT has been abolished from next yr
-Forex trading is taxed at lower rate that equities trading. But someone said forex trading in illegal in India. Need clarity.
-Short term gain cannot be set off with long term loss or salary income but can be carried forward. Eg: Loss on shares held for more than a yr, but made profit in day trading. You have to pay tax on day trading profits.
-There is LTCG on debt MFs: 20% with indexation or 10% without. Surcharges / cesses extra (Not quite clear)
-Taxes can be paid anytime without penalty if the same is before any notice sent by IT even if its 50 years....It shows that it was a bonafide mistake and not intentional on your part to hold back the tax..
-TDS from FD is deducted if Interst income is more than 10k in the FY
-Long term profits can be set-off against long term losses
-Intrady trading income from equities is speculation and from derivatives is business both taxed at the same rate
-Short term losses can only be set off against capital gain (long term or short term) if not possible then maximum carry forward allowed is for 8 years for non speculative
-IT Returns for past 6 yrs have to be maintained as per current IT laws
Congratulation on 2yrs completion of your thread. It is good to have a tax expert among traders! I feel sorry that you have to answer the same silly questions time and again when they have been clearly explained already. So to prevent myself and new boarders doing so I have read all the 750+ posts in this thread an complied a simple Q&A and a small list of useful tit-bits from your replies. I think there are some issue with them since the tax laws have changed and since you started this thread and I myself didn't understand some of your replies. I request you to please go though it in your free time and update missing or wrong info and after reading it I have a couple of questions to ask.
Q&A:
====
1.I trade in intraday,short term and in F&O,so how to calculate the turnover for each?
A.) Tax audit is to be done when one's turnover is above 40 Lacs...For those in other industry it is the basic sale achieved....But in the case of transactions of F&O there is a difference... For the purpose of F&O transactions the limit of 40 Lacs is the profit or loss in absolute terms...Let me explain with an example....
Suppose you bought one lot of 150 shares of Financial Technology at Rs. 3000...Then you sold it at 3100....Therefore your profit is 100*150=15000...
Now you bought one lot of 1400 shares of HCC at 100 and then sold it for 110...so your profit if 10*1400=15000...
Third, you bought one lot of 8000 shares of IFCI at 60 and then sold it for 50...so you incur a loss of Rs. 10*8000=80000...
therefore for the purpose of determining the total turnover you achieved would be 15000(FTIL profit) + 14000(HCC profit) + 80000(IFCI loss) = 1,19,000.... it would not be the total transaction values but the absolute profit or loss incurred in the transactions...
2.Do i need to maintain any book of accounts,if yes how is that done
A.) Books of accounts are required of the income from business exceeds 1,20,000 so judge from yourself....In any case i suggest maintenance of books.
3.while filing return do i need to submit all the electronic contract notes printouts?
A.) NOTHING is to be attached with your ITR.....absolutely NOTHING
4.how to add this income in my salary income?
A.) Very simple.....simply add both the incomes and then calculate the tax payable on them....
5.when is tax audit applicable in each case that is intraday trading and F&O.
A.) Tax Audit is required when the sale exceeds 40 lacs....determine it according to the formula given to you in the Answer1
Compiled replies:
===============
-Depreciation and costs can be deducted when calculating tax from business income, also payment done to accountant to maintain books
-Capital gains tax is lower than business tax
-Business income is taxed at 30% flat rate
-Individuals are allowed exemption limits but corporates are not
-Tax need not filed if gross income (income before deductions) is less than exemption limit
-Trading income tax filed with ITR3
-If business income then ITR4
-Turnover is more than 40L in business then it is auditable
-If it is auditable then you need to maintain your books
-If income from derivatives then turnover is total profit+total loss (not -loss, +loss) is "used to determine" if auditable
-STCG can't be offset against long term loss but long term gain can be offset agaist STCG
-STCG on equities is 15% (over expemtion) LTCG on equities is nil (LT for equities is 1yr all else it is 3yrs)
-I wonder what happended to the guy who wanted to invest all his life savings in RPL
-Land purchased outside 8km city limit doesn't have to pay CG tax
-A "pure" day trader is taxed at 30% flat rate (incase of a seperate account with investments that it can be filed as CG tax)
-Tax Free: PF, ELSS, Divident on shares and debt funds
-If tax is filed as business then the closing value of your stock can be used to calculate tax (if your stock are work lower than purchase you can save tax on the difference by deducting it from taxable income)
-Loss can be carried over for 4 yrs or 8yrs (need clarification)
-STT is deducted for taxable income under business head (trader). No deduction for investor (STCG/LTCG)
-80C can be used for deduction from business income
-Books of accounts are cash book, day book, ledger and relevant vouchers with their supporting. Tally will do but Excel will not.
-F&O income comes under business income. Here option turnover is the option premium
-Gifted money tax is to be paid by the person who gifts it
-I guess the commodities equivalent of STT, CTT has been abolished from next yr
-Forex trading is taxed at lower rate that equities trading. But someone said forex trading in illegal in India. Need clarity.
-Short term gain cannot be set off with long term loss or salary income but can be carried forward. Eg: Loss on shares held for more than a yr, but made profit in day trading. You have to pay tax on day trading profits.
-There is LTCG on debt MFs: 20% with indexation or 10% without. Surcharges / cesses extra (Not quite clear)
-Taxes can be paid anytime without penalty if the same is before any notice sent by IT even if its 50 years....It shows that it was a bonafide mistake and not intentional on your part to hold back the tax..
-TDS from FD is deducted if Interst income is more than 10k in the FY
-Long term profits can be set-off against long term losses
-Intrady trading income from equities is speculation and from derivatives is business both taxed at the same rate
-Short term losses can only be set off against capital gain (long term or short term) if not possible then maximum carry forward allowed is for 8 years for non speculative
-IT Returns for past 6 yrs have to be maintained as per current IT laws
now let me smoothen a few wrinkles....Actually lazytrader has done a tremendous job, but in the field of law few misplaced words can create havoc....so just ironing them out....from the next post...
I hope Lazy does not mind me copying what he has written....
Q&A:
====
1.I trade in intraday,short term and in F&O,so how to calculate the turnover for each?
A.) Tax audit is to be done when one's turnover is above 40 Lacs...For those in other industry it is the basic sale achieved....But in the case of transactions of F&O there is a difference... For the purpose of F&O transactions the limit of 40 Lacs is the profit or loss in absolute terms...Let me explain with an example....
Suppose you bought one lot of 150 shares of Financial Technology at Rs. 3000...Then you sold it at 3100....Therefore your profit is 100*150=15000...
Now you bought one lot of 1400 shares of HCC at 100 and then sold it for 110...so your profit if 10*1400=15000...
Third, you bought one lot of 8000 shares of IFCI at 60 and then sold it for 50...so you incur a loss of Rs. 10*8000=80000...
therefore for the purpose of determining the total turnover you achieved would be 15000(FTIL profit) + 14000(HCC profit) + 80000(IFCI loss) = 1,19,000.... it would not be the total transaction values but the absolute profit or loss incurred in the transactions...
2.Do i need to maintain any book of accounts,if yes how is that done
A.) Books of accounts are required of the income from business exceeds 1,20,000 so judge from yourself....In any case i suggest maintenance of books.
3.while filing return do i need to submit all the electronic contract notes printouts?
A.) NOTHING is to be attached with your ITR.....absolutely NOTHING
4.how to add this income in my salary income?
A.) Very simple.....simply add both the incomes and then calculate the tax payable on them....
5.when is tax audit applicable in each case that is intraday trading and F&O.
A.) Tax Audit is required when the sale exceeds 40 lacs....determine it according to the formula given to you in the Answer1
Compiled replies:
===============
-Depreciation and Expenses which are directly relateable to the income can be deducted when calculating tax from business income, also payment done to accountant to maintain books.
-Presently Capital gains tax is lower than business tax.
-Business income is taxed at 30% flat rate if you are a firm...If you are an individual then as per your taxation slab.
-Individuals are allowed exemption limits but corporates are not.
-Return need not filed if gross income (income before deductions) is less than exemption limit. THOUGH WOULD SUGGEST EVERYONE TO FILE A RETURN EVERY YEAR EVEN IF THE INCOME IS RS. 10
-Turnover is more than 40L in business then it is auditable. Calculate as mentioned in Q1.
-Books needs to be maintianed if the sale in any of the previous three years is in excess of Rs. 10,00,000 OR income from business is in excess of Rs. 1,20,000.
-STCG can't be offset against long term loss but long term gain can be offset agaist STCG. Though it is not advisable as LTCG is tax exmept.
-STCG on equities is 15% (over expemtion) LTCG on equities is nil (LT for equities is 1yr all else it is 3yrs)
-Land purchased outside 8km city limit doesn't have to pay CG tax
-A "pure" day trader is taxed at 30% flat rate (incase of a seperate account with investments that it can be filed as CG tax).
-Tax Free: PF, ELSS, Dividend on shares.
-If tax is filed as business then the closing value of your stock can be used to calculate tax (if your stock are work lower than purchase you can save tax on the difference by deducting it from taxable income)
-Loss can be carried over for 4 yrs for speculative loss or 8yrs non speculative loss.
-STT is deducted for taxable income under business head (trader). No deduction for investor (STCG/LTCG)
-80C can be used for deduction from your gross total income.
-Books of accounts are cash book, day book, ledger and relevant vouchers with their supporting. Tally will do but Excel will not.
-F&O income comes under business income. Here option turnover is the option premium
-Gifted money there is no tax if between relatives.
-Forex trading is taxed at higher rate than equity. It is not taxable under capital gains.
-Short term gain cannot be set off with long term loss or salary income but can be carried forward. Eg: Loss on shares held for more than a yr, but made profit in day trading. You have to pay tax on day trading profits.
-There is LTCG on debt MFs: 20% with indexation or 10% without. Surcharges / cesses extra.
-Taxes can be paid anytime without penalty if the same is before any notice sent by IT even if its 50 years....It shows that it was a bonafide mistake and not intentional on your part to hold back the tax.
-TDS from FD is deducted if Interst income is more than 10k in the FY.
-Long term profits can be set-off against long term losses.
-Intrady trading income from equities is speculation and from derivatives is business both taxed at the same rate. But both cannot be set off against each other....Speculative income can only offset speculative gain.
-Short term losses can only be set off against capital gain (long term or short term) if not possible then maximum carry forward allowed is for 8 years.
-Books for past 6 yrs have to be maintained as per current IT laws.
====
1.I trade in intraday,short term and in F&O,so how to calculate the turnover for each?
A.) Tax audit is to be done when one's turnover is above 40 Lacs...For those in other industry it is the basic sale achieved....But in the case of transactions of F&O there is a difference... For the purpose of F&O transactions the limit of 40 Lacs is the profit or loss in absolute terms...Let me explain with an example....
Suppose you bought one lot of 150 shares of Financial Technology at Rs. 3000...Then you sold it at 3100....Therefore your profit is 100*150=15000...
Now you bought one lot of 1400 shares of HCC at 100 and then sold it for 110...so your profit if 10*1400=15000...
Third, you bought one lot of 8000 shares of IFCI at 60 and then sold it for 50...so you incur a loss of Rs. 10*8000=80000...
therefore for the purpose of determining the total turnover you achieved would be 15000(FTIL profit) + 14000(HCC profit) + 80000(IFCI loss) = 1,19,000.... it would not be the total transaction values but the absolute profit or loss incurred in the transactions...
2.Do i need to maintain any book of accounts,if yes how is that done
A.) Books of accounts are required of the income from business exceeds 1,20,000 so judge from yourself....In any case i suggest maintenance of books.
3.while filing return do i need to submit all the electronic contract notes printouts?
A.) NOTHING is to be attached with your ITR.....absolutely NOTHING
4.how to add this income in my salary income?
A.) Very simple.....simply add both the incomes and then calculate the tax payable on them....
5.when is tax audit applicable in each case that is intraday trading and F&O.
A.) Tax Audit is required when the sale exceeds 40 lacs....determine it according to the formula given to you in the Answer1
Compiled replies:
===============
-Depreciation and Expenses which are directly relateable to the income can be deducted when calculating tax from business income, also payment done to accountant to maintain books.
-Presently Capital gains tax is lower than business tax.
-Business income is taxed at 30% flat rate if you are a firm...If you are an individual then as per your taxation slab.
-Individuals are allowed exemption limits but corporates are not.
-Return need not filed if gross income (income before deductions) is less than exemption limit. THOUGH WOULD SUGGEST EVERYONE TO FILE A RETURN EVERY YEAR EVEN IF THE INCOME IS RS. 10
-Turnover is more than 40L in business then it is auditable. Calculate as mentioned in Q1.
-Books needs to be maintianed if the sale in any of the previous three years is in excess of Rs. 10,00,000 OR income from business is in excess of Rs. 1,20,000.
-STCG can't be offset against long term loss but long term gain can be offset agaist STCG. Though it is not advisable as LTCG is tax exmept.
-STCG on equities is 15% (over expemtion) LTCG on equities is nil (LT for equities is 1yr all else it is 3yrs)
-Land purchased outside 8km city limit doesn't have to pay CG tax
-A "pure" day trader is taxed at 30% flat rate (incase of a seperate account with investments that it can be filed as CG tax).
-Tax Free: PF, ELSS, Dividend on shares.
-If tax is filed as business then the closing value of your stock can be used to calculate tax (if your stock are work lower than purchase you can save tax on the difference by deducting it from taxable income)
-Loss can be carried over for 4 yrs for speculative loss or 8yrs non speculative loss.
-STT is deducted for taxable income under business head (trader). No deduction for investor (STCG/LTCG)
-80C can be used for deduction from your gross total income.
-Books of accounts are cash book, day book, ledger and relevant vouchers with their supporting. Tally will do but Excel will not.
-F&O income comes under business income. Here option turnover is the option premium
-Gifted money there is no tax if between relatives.
-Forex trading is taxed at higher rate than equity. It is not taxable under capital gains.
-Short term gain cannot be set off with long term loss or salary income but can be carried forward. Eg: Loss on shares held for more than a yr, but made profit in day trading. You have to pay tax on day trading profits.
-There is LTCG on debt MFs: 20% with indexation or 10% without. Surcharges / cesses extra.
-Taxes can be paid anytime without penalty if the same is before any notice sent by IT even if its 50 years....It shows that it was a bonafide mistake and not intentional on your part to hold back the tax.
-TDS from FD is deducted if Interst income is more than 10k in the FY.
-Long term profits can be set-off against long term losses.
-Intrady trading income from equities is speculation and from derivatives is business both taxed at the same rate. But both cannot be set off against each other....Speculative income can only offset speculative gain.
-Short term losses can only be set off against capital gain (long term or short term) if not possible then maximum carry forward allowed is for 8 years.
-Books for past 6 yrs have to be maintained as per current IT laws.
Hello ,
I used to do a job till May 09 ,however I am now into full time trading.
I intend to do Intraday, however I may buy some shares and keep with me.
My question is
1. How much tax will I be taxed on intraday. Will it be considered a business income or can i show it as trading income
2. How much will I be taxed incase I buy a share in Dec 2009 and sell in May 2010.
3. How much will I be taxed incase I buy a share in Dec 2009 and sell in Jan 2010.
4. Is closing stock of shares also taxed. please explain.
Regards,
I used to do a job till May 09 ,however I am now into full time trading.
I intend to do Intraday, however I may buy some shares and keep with me.
My question is
1. How much tax will I be taxed on intraday. Will it be considered a business income or can i show it as trading income
2. How much will I be taxed incase I buy a share in Dec 2009 and sell in May 2010.
3. How much will I be taxed incase I buy a share in Dec 2009 and sell in Jan 2010.
4. Is closing stock of shares also taxed. please explain.
Regards,
DId not get the wealth tax angle properly...
I was asking for my following e.g sir
From this year i have started filing my mom returns...
I showed jewelery worth 12.5 lakhs.......SHe has FD worth rupees 1 lakh....though it didnt crossed 15 Lakh level....the person who was helping in filing my return at CA office told......That Jewelery and FD amount both together shouldnt pass the 15 Lakh level....Though from next year the level will be 30 Lakh ...i wanted to know does FD qualifies in wealth tax attracting stuff(as i cant find or unable to understand the wealth tax laws)....
And what about cash in hand stuff does that too carry wealth tax after certain limit?
I was asking for my following e.g sir
From this year i have started filing my mom returns...
I showed jewelery worth 12.5 lakhs.......SHe has FD worth rupees 1 lakh....though it didnt crossed 15 Lakh level....the person who was helping in filing my return at CA office told......That Jewelery and FD amount both together shouldnt pass the 15 Lakh level....Though from next year the level will be 30 Lakh ...i wanted to know does FD qualifies in wealth tax attracting stuff(as i cant find or unable to understand the wealth tax laws)....
And what about cash in hand stuff does that too carry wealth tax after certain limit?
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