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

[ankur_rohira2000]

hi
i have to appear for nism series-1 currency derivative exam on 16/10/10 . i was having difficulty in understanding accounting chapter in workbook but 1 of my friends told me that accounting for equity derivatives & currency derivatives
is same as of now . is it true ?
as of now this is how i under stand it :--

Accounting at the inception of the contract

Initial Margin Money paid
Initial Margin - currency Futures A/c Dr. ----
To Bank A/c ----

Accounting at the time of Daily settlement ( payment received by client )
Mark-to-Market Margin currency futures A/c Dr.
To Bank A/c
(Being net Margin Money paid for day)

Accounting at the time of Daily settlement ( payment made by client )
Bank A/c Dr.
To Mark-to-Market Margin currency future A/c
(Being net Margin Money received for day)

is this right ? moreover can any body tell me about accounting treatment of derivative ( equity / currency ) at the time of final settlement ? & in case i ( client of a broker ) default on a payment ( unable / unwilling to pay ) what should be accounting entry in my books ?

 

[lotmanythings]

Tax query regarding company fixed deposits

Hi,

I have opened a company deposit in financial year 2009-2010(compound reinvestment option). But the company did not send me any interest certificate of accrued interest
since I submitted a 15G form.

But is there any accepted procedure to calculate the accrued interest prescribed by
the IT department so that I can calculate it myself.

Thanks

 

[lotmanythings]

Company fixed deposit accrued interest

sorry repeat post

 

[gauravb9]

What a masterpiece...........

What a masterpiece this thread is.............Truly an amazing piece of work!!!

I came across this thread last week and have read about 30-40 pages and so far haven't found even a single query which remained unanswered............It's really difficult to find such selfless service which has continued for 3 years and counting...............

Dear Diosys,

Thanks a lot for creating this thread, hearty congratulations for bringing it this far and best wishes for all your future endeavors.

Regards,
Gaurav

ps:my questions and doubts coming up in next post.......

 

[gauravb9]

Derivatives income?

Dear Diosys,

Due to my limited knowledge about taxation matters, even after reading 30 - 40 pages, I have got some doubts........so putting in the following hypothetical scenario -

Suppose I am a salaried employee falling in 20% tax bracket(say Annual Income - Rs. 4 lacs). Now in the previous financial year(09-10), if I made a single transaction in derivatives segment(say sold a Nifty CALL) and made a net profit of Rs. 10,000 then I have the following questions -

1. Even though I made only a single transaction in derivatives segment and made a small profit of just Rs. 10,000............still should this profit be compulsorily treated as Business Income or it can be treated as STCG?

2. If the above profit should be treated as Business Income, then in this scenario -
a.) What should be the income tax rate applicable for the profit made?
b.) Do I need to maintain book of accounts?


Sorry to bug you with same set of questions............I know you have answered them at multiple places...........but just wanted to remove confusion I have.

Thanks in advance,
Gaurav

 

[27.anurag]

Hi,

I have made STCG of Rs 1.5 lakhs and F&O Loss of Rs 60,000 this year. I am also carrying forward last year's STCL & F&O Loss which was declared in last year's return and filed on time. Plz advise if:

1. This year's F&O loss can be set off against this year's STCG of Rs 1.5 Lakhs?
2. Last years's STCL can be set off against this year's STCG?
3. Last year's F&O loss can be set off against this year's STCG?
4. Can an investor claim STT as expense from this year onward for calculating STCG?

Plz advise.

 

[nac]

Re: Derivatives income?

Suppose I am a salaried employee falling in 20% tax bracket(say Annual Income - Rs. 4 lacs). Now in the previous financial year(09-10), if I made a single transaction in derivatives segment(say sold a Nifty CALL) and made a net profit of Rs. 10,000 then I have the following questions -

1. Even though I made only a single transaction in derivatives segment and made a small profit of just Rs. 10,000............still should this profit be compulsorily treated as Business Income or it can be treated as STCG?

2. If the above profit should be treated as Business Income, then in this scenario -
a.) What should be the income tax rate applicable for the profit made?
b.) Do I need to maintain book of accounts?

1. Derivatives trading income never be treated as STCG. It's business income.
2. a) For individual, this income will be added to your salary and tax need to paid based on the slab.
b) In your case, it is not mandatory, but dio suggest to maintain books.

I think, I am right. Wait for diosys to confirm this.

 

[gauravb9]

Re: Derivatives income?

1. Derivatives trading income never be treated as STCG. It's business income.
2. a) For individual, this income will be added to your salary and tax need to paid based on the slab.
b) In your case, it is not mandatory, but dio suggest to maintain books.

I think, I am right. Wait for diosys to confirm this.

Thanks a lot nac for answering my query.......

Could you please tell me when does it become mandatory to maintain book of accounts?

Thanks,
Gaurav

 

[nac]

Re: Derivatives income?

Could you please tell me when does it become mandatory to maintain book of accounts?

Books needs to be maintained 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.

I read your post saying that you read around 40 pages. Please follow diosys signature, you would get some basic things about taxation...

 

[gauravb9]

Re: Derivatives income?

Books needs to be maintained 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.

I read your post saying that you read around 40 pages. Please follow diosys signature, you would get some basic things about taxation...

Nac........Thanks again.
I know all my questions are already answered at multiple places in this thread...........but still I needed a clarification as I had read some contradictory statements at various places...........things are much clearer now...........Thanks a lot.

~Gaurav