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

[diosys]

Re: 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

Thank you for your appreciation.

transactions relating to F&O are mandatory to be classified under business income. Hence no option there even if a single transaction.

Your rate if tax would depend upon other income also. In the present example if i take forward then your slab would not change since your total income goes upto Rs. 4.10 lacs.

Books of accounts is required if you have a turnover of greater than Rs. 10 lacs or income greater than Rs. 1.2 Lacs BOTH RELATES ONLY TO INCOME OR SALE UNDER BUSINESS INCOME AND NOT OTHER INCOMES.

 

[diosys]

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.

first i would answer query 4.

Yes claim and increase / decrease your loss / profit since it becomes a cost which paid for incurring the transaction.

1.) YES.
2.) YES.
3.) NO.

 

[diosys]

Hi,
I have made a loss of 15k in option trading this fiscal year ended March. Reading the posts I have understood that this income falls under business income. I just wanted to know whether this loss that i have made can be set against my salary.

Thanks!

Btw this is an excellent thread! Keep up the good work!:clap:

No. Business loss can be set off against any income except Salary Income.

 

[symantec]

My brother is working with XXX Ltd and has beeen deported to Sweden since January, 2010. He is ing paid his basic salary in India and some amount in Swedish currency there in Sweden. Now as per the treaty between India and Sweden on double taxation, Swedish Govt is charging him tax on the amount he is earning in India also. Below is the explanation from them on it:



Article 15 in the tax treaty between Sweden and India: Wages and other similar remuneration derived by a resident of India in respect of an employment shall be taxable only in India unless the employment is exercised in Sweden. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in Sweden.

In the case of India, double taxation shall be avoided as follows:
(a) Where a resident of India derives income which, in accordance with the provisions of this Convention, may be taxed in Sweden, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in Sweden whether directly or by way of deduction at source. Such amount shall not however exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income which may be taxed in Sweden.

Now the problem arises since even Indian salary was taxed in India too. In short, he got taxed on the same salary (Indian basic part) in both the countries Sweden and India. As per the double taxation rules, he should get back the tax refund which was deducted in India. I'd like to know the process of it. Also if you can help him to claim the refund

 

[smartboy1jan1982]

If your inverter batteries last 4 years then it needs to be capitalized otherwise they can be expensed off also.

Can you explain it in detail or in even simpler language because I am not really sure that I understood it fully.

Do you mean to say that I could depreciate it at 15 % per year till it gets zero OR I could claim it as expenses and deduct 100 % in the year of purchasing the batteries? What should I do?

 

[suresh9928]

Dear DIOSYS ,
I read your tax inf carefully. especially derivative part. thanx very much dor it.
please further clear 2 doubts. 1) in futurre also, only sum of profit or loss are calucalted as a turnover for tax audit or pure future turnover.? necessary e-filing,,? or revised option will help in emergency if not filed by e-filing ..?

2) I want to show income of my non earning family member either to mother or wife..may be by means of gift..is it ok ? say Rs. 3 lakh gifted by cheque..? to trdae in deriavties. if not ..then HOW..?

Regards !! hope u get my point. !!

 

[rag_bh]

Hi diosys

How to deal with open FnO positions opened in end of March 2010 and closed in next financial year(say April/May 2010). Do we need to take net MTM profit/loss into account till 31st march or not? or Is this can be part of next fin. year.

Thanks
raghu

 

[Star Scream]

Originally Posted by Star Scream
Hi,
I have made a loss of 15k in option trading this fiscal year ended March. Reading the posts I have understood that this income falls under business income. I just wanted to know whether this loss that i have made can be set against my salary.

Thanks!

Btw this is an excellent thread! Keep up the good work!
No. Business loss can be set off against any income except Salary Income.
__________________
TAX READY RECKONER

The views or opinions expressed by me in this thread are as per the prevalent law and case laws on the date and time of the reply. Understanding of Law is a matter of interpretation and hence there can be two divergent views on the same matter. No responsibility of any sort would be undertaken by me or any other person replying for the actions taken upon any opinions expressed or information posted here. The person shall be solely responsible for his or her actions.


Since I have business income i need to fill ITR 4 right?
But i have actually made a loss so do i need to fill ITR 4?

 

[Star Scream]

No. Business loss can be set off against any income except Salary Income.

So do i need to fill ITR 4 even though i have made a business loss?

 

[magnet]

NSDL charges of Rs. 200 after every sell ???

Seems strange. Anyways before commenting i would need to know the exact nature of these charges. hence get hold of your broker and confirm that for what these charges have been levied.

Nope 200 total....Its the charge which Bse,nse or exchanges charge after u do any sell transaction....Its 22 buk approximately...Whether i sell 1 shares or 100...

I asked one CA on another forum..He said ya i can count it as expense....Also will check with my Ca to him ill be handing over my details to file return tomm

Also i pmed u 1 querry....any answer to that sir