Documents to trade in Derivatives for students/unemployed persons

[Klewtar]

Hello,

I plan to trade the NIFTY, S&P 500 and DJIA (my TA system would use a TMA slope indicator for Meta Trader with the transactions done by Sharekhan's Trade Tiger.)

My broker (Sharekhan) forwarded me a form where I have to provide the following to trade in derivatives:
-Copy of ITR acknowledgement
-Copy of annual accounts
-Copy of form 16 in case of salaried income
-Net worth certificate duly certified by chartered accountant
-Salary Slip

My last salary was after a 3 month job in a call center in 2007. Till 2011, I was making some pocket money as a web developer (not enough to pay taxes.)

What documents are to be submitted for trading derivatives/futures/options by someone not employed/not earned enough to pay taxes?

I have been given some money by my family to trade with but I'm not sure what documentation is to be submitted by me to enable me to trade in the derivatives segment.

Do I enlist a chartered accountant to certify a net worth certificate or is another document more suitable for me?

 

[chandra1]

I also want to know the answers to the questions raised by you.

Thanks

 

[vikrit]

.

Fill your ITR return with the help of CA or income tax advocate, (ask your family members with whom help they fill), you can do it by yourself. But you must have Pan no. first, apply for that too. You will not need to give any tax, ITR can be filled for taxable or non taxable income by any source.


.

 

[Klewtar]

I have a PAN card, I wouldn't be able to trade in commodities without one.

I have made losses last year trading in commodities and the money I used to trade was given to me by family.

Apart from getting a net worth certificate, I may ask an a CA about the ITR option too.

 

[adityasaraf007]

Oh... don't worry....

Photocopy of last 6 months Bank Statement/Passbook is more than enough as Income Proof for both Equities and Commodities.... Nothing else is required....

I have recently opened an account with the help of Bank Statement as Income Proof....

 

[vikrit]

I have a PAN card, I wouldn't be able to trade in commodities without one.

I have made losses last year trading in commodities and the money I used to trade was given to me by family.

Apart from getting a net worth certificate, I may ask an a CA about the ITR option too.

any one thing require, not all. even bank statement is ok as aditya said but should be active in last 6 months as i know.

one more suggestion as you made losses, then when/if you will fill ITR, mention the losses in it (if trading account was in your name),
you can carry forward the losses and when get profit next year, you can adjust the losses with profits as businesses do, so have to pay LESS TAX.
Losses can be carry forward till 8 years, but have to mention every year in ITR.

.

 

[sridhar]

Another proof most brokers accept is a recent demat a/c statement. Of course it would be better if you had some shares in the a/c.

My advice - do not go directly into derivatives as it is a highly leveraged activity. You look at the possible profits, which seem mouth watering, but a few wrong calls will wipe out all your capital.

If you must, then go in with money that you are mentally prepared to write off. Otherwise the agony of making a loss freezes your decision making leading to larger losses. Also work out strict stop loss rules & follow them ruthlessly. If you have made a call & it turns out to be wrong never continue to hang on to ur position in the hope that the situation will turn - take a loss to try another day.

Derivatives are all about minimising ur losses and being prepared to avoid a trade if you are not comfortable.