Fire your tax related queries and i would get it solved!!!

[mfrahman]

Hi Diosys,

Iam a newbie in trading. I want some clarifications(May look stupid,sorry for that):

1)Will Turnover effect in Tax calculations? like I have done a 10 crore turnover and got only 1000 profit then for 1000 I need to pay the tax?

2)Iam an employee and my salary income is 7 lacs/year, so my trading income will come under 30% slab or to its separate slab?

3)Tax slabs differ for Intraday and for Short term/Long Term gains?

Thanks in advance.

 

[diosys]

Dear diosys

Thank you for the response.

Is it a good idea to gift money to my mother and trade through my mothers account ?

How is the profit in her account treated ?

Regards

jai gurudev

it would be taxable in her hand.

 

[diosys]

Hi Diosys,

Iam a newbie in trading. I want some clarifications(May look stupid,sorry for that):

1)Will Turnover effect in Tax calculations? like I have done a 10 crore turnover and got only 1000 profit then for 1000 I need to pay the tax?

2)Iam an employee and my salary income is 7 lacs/year, so my trading income will come under 30% slab or to its separate slab?

3)Tax slabs differ for Intraday and for Short term/Long Term gains?

Thanks in advance.

1.) No turnover does not matter.

2.) No, all your income would be clubbed to determine your taxable slab.

3.) Not slabs but the tax rates are different.

 

[isha77]

I have recently opened a second demat account. The shares of one company 'A' I hold in account 1 has good gains so I dont want to sell it and be taxed heavily. If I trade shares of same company in the second demat account i.e sell shares from account 2 of same company which has losses / minimum gains in account2 is the STCG calculated separately for each demat account or first in first out applied combining holdings across demat accounts.

 

[diosys]

I have recently opened a second demat account. The shares of one company 'A' I hold in account 1 has good gains so I dont want to sell it and be taxed heavily. If I trade shares of same company in the second demat account i.e sell shares from account 2 of same company which has losses / minimum gains in account2 is the STCG calculated separately for each demat account or first in first out applied combining holdings across demat accounts.

it is done for the individual and not demat wise....

Hence in your language they would be combined for FIFO purposes.

 

[isha77]

Thanks for the reply diosys.
I was confused based on something I read at http://www.personalfn.com/tax/faqshares.html where it said that -
"In case of multiple demat accounts, the capital gains on sale of shares has to be computed on the basis of the FIFO with reference to the particular account from where the shares are sold. The FIFO method was introduced to bypass the process of determining the cost on one to one basis with the particular Depository Participant. "

I am not sure if that information was old , but it had me confused as I understood if I sell from a different DP demat account where I had bought at a higher price the gain would be less.

 

[isha77]

it is done for the individual and not demat wise....

Hence in your language they would be combined for FIFO purposes.

Thanks for the reply diosys.I was actually confused about this reading http ://www .personalfn. com/tax/faqshares.html

where it says
In case of multiple demat accounts, the capital gains on sale of shares has to be computed on the basis of the FIFO with reference to the particular account from where the shares are sold. The FIFO method was introduced to bypass the process of determining the cost on one to one basis with the particular Depository Participant.

The info may be old but I got confused assuming if I sell from second demat with a different DP where I had bought at a higher price the gain would be less

 

[diosys]

Thanks for the reply diosys.
I was confused based on something I read at http://www.personalfn.com/tax/faqshares.html where it said that -
"In case of multiple demat accounts, the capital gains on sale of shares has to be computed on the basis of the FIFO with reference to the particular account from where the shares are sold. The FIFO method was introduced to bypass the process of determining the cost on one to one basis with the particular Depository Participant. "

I am not sure if that information was old , but it had me confused as I understood if I sell from a different DP demat account where I had bought at a higher price the gain would be less.

One thing which that misses is that how do you see yourself and your transactions...

What is meant by the link is that one of your demat has to be said to be business income and the other would be for capital gain purposes...

One cannot have two different demat accounts and say that from both i have capital gain income....One would be a business income demat account and the other would be a capital gain demat account....

If you can differentiate your demat accounts on this basis then well and good...

 

[Raj133]

2.) No, all your income would be clubbed to determine your taxable slab.

Hi,

i think whatever the profit we are getting from commodity we have to pay 10% fixed tax, not more than 10% and its not calculated with other income taxable slab. Please correct me if i am wrong.

Thanks

 

[diosys]

Hi,

i think whatever the profit we are getting from commodity we have to pay 10% fixed tax, not more than 10% and its not calculated with other income taxable slab. Please correct me if i am wrong.

Thanks

Unfortunately you are absolutely wrong...

Commodity profits are taxable at the full rate of taxation depending on your other taxable incomes.