Hi diosys,
There are certain aspects to the filing of income from equities that seem ambiguous to me..please clarify if you find the time.I'm sure all or most of it has already been answered.I had gone through a lot of old pages here, sometime ago and had found many answers there. I don't remember most of it now though .I dread having to go through all of it again...so...
1) Is business income same as speculative income? What does income from day trading fall under?
2)I can trade and invest using the same account..but maintain separate books for both,thereby paying capital gains as well as tax on business income(or is it speculative income?), for transactions on the same account , right?
3)Definition of trading is open to interpretation , right? I presume that intra day transactions definitely fall under trading. What about BTST then? A stock bought in BTST is mostly bought with the intent of trading ( but can't it be used with the intent to cut losses in case of drastic decline in price from the very moment of purchase, even when you're open to holding onto the position for long term barring very steep drop in prices and dramatic change in business outlook (like in the case of RNRL immediately after the judgment),which would not be possible with a non btst purchase...or does investment mean holding onto your losses no matter how steep the fall in price.Now, I must add that all of this is not likely to happen in the little extra time that BTST buys..but still. It's more likely that I don't really understand investment
4)Again, how can intent to trade be established? Can a stock not be bought with the intent to invest..but be sold in a few days' time due to unforeseen external factors. Say...a stock were purchased with a target of 30% appreciation in price in a time frame of an year..but due to unforeseen positive developments, in a week's time, if the stock were to meet the target, and hence if it were to be sold,would this count as trading? How can intent even be established objectively? Are there any objective guidelines at all, that may be used as a reference point for this purpose - even if they are not binding on anyone?
5)Would the assessing officer be bound by any guidelines for scenarios such as the aforementioned?
6)Do accounts with turnover greater than 40 lakhs need auditing? Or is it only if the turnover from trading is greater than 40 lakhs? If the turnover from transactions resulting in capital gains is greater than 40 lakhs, then would no auditing be required? I'm somewhat aware of the allowances made for F&O transactions,but they don't apply to me currently at least.
7)In case of the final tally for all transactions in an year resulting in loss, day trading as well as investment, is it still mandatory for this loss to be declared
while filing tax or is it needed only if the losses need to be carried forward?
8) Is day trading income added to salary to arrive at tax rates for income?
That's a lot of questions...but it's tax-filing time and I haven't the slightest clue what goes where..and the customer care folks etc at online-filing portals seem to know no better.
Please try to clarify if possible...thanks!
