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

[gauravb9]

I am a salaried employee and in the previous financial year(09-10), I have incurred a loss of Rs. 14k in derivatives(FnO) whereas I have received around 11k as income from interest paid by bank in my savings account.

I have the following questions -

Q1. Can the loss in derivatives be set off against income from interest?
(I think YES. Please confirm)

Assuming the ans to Q1 is YES, my net loss is around Rs. 3k. I am not interested in carrying forward this loss.....

Q2. Is it mandatory to show this loss in my IT return?

Q3. Depending on the answer to Q2, which form should I fill?

Q4. If the answer to Q2 is YES, what documents(or proofs) a CA would need to prepare my IT return? Would he ask for my bank account statement or dmat account statement or contract notes?

I do not maintain book of accounts(as currently it is not mandatory for me). I have compiled all the transaction history in an excel sheet. Is that sufficient or CA would need more?

Thanks in advance,
Gaurav

 

[diosys]

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

Yes he should get the tax refund in India....

I would not be of much help since he would have to claim the refund in the city in which he is assessed in India.

 

[diosys]

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?

An asset is capitalized and depreciation claimed and an expense is written off.

Asset is such which giver recurring advantage to you over a considerable period of time though the money against it has been paid at one time.

In your case since the batteries (because they last for a long period) should be capitalized and depreciation claimed on them @15%.

 

[diosys]

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. !!

Sum of profit and loss is your turnover. Efiling mandatory for tax audit individuals.

To your mother you can but any income generated by your wife (on the capital gifted by you) would be taxable in your hands.

 

[diosys]

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

You should take the MTM on 31st March itself.

 

[diosys]

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?

Yes you need to file ITR4

 

[diosys]

I am a salaried employee and in the previous financial year(09-10), I have incurred a loss of Rs. 14k in derivatives(FnO) whereas I have received around 11k as income from interest paid by bank in my savings account.

I have the following questions -

Q1. Can the loss in derivatives be set off against income from interest?
(I think YES. Please confirm)

Assuming the ans to Q1 is YES, my net loss is around Rs. 3k. I am not interested in carrying forward this loss.....

Q2. Is it mandatory to show this loss in my IT return?

Q3. Depending on the answer to Q2, which form should I fill?

Q4. If the answer to Q2 is YES, what documents(or proofs) a CA would need to prepare my IT return? Would he ask for my bank account statement or dmat account statement or contract notes?

I do not maintain book of accounts(as currently it is not mandatory for me). I have compiled all the transaction history in an excel sheet. Is that sufficient or CA would need more?

Thanks in advance,
Gaurav

Yes to ques 1.

It is not mandatory to carry forward the loss. It is your choice.

and if book are not mandatory then excel should suffice.

 

[rajivnc]

Few doubts about the acknowledgement slip we got after e-filing.

1) Is this acknowledgement slip equivalent to the IT return Certificate obtained when we do the IT -return filing via a Chartered Accountant.

2) Does the Banks[ typically SBI, SBT ] accept this acknowledgement slip while applying for Auto / House loan.

3) How does banks used to verify these Acknowledgement slips ?

 

[diosys]

Few doubts about the acknowledgement slip we got after e-filing.

1) Is this acknowledgement slip equivalent to the IT return Certificate obtained when we do the IT -return filing via a Chartered Accountant.

2) Does the Banks[ typically SBI, SBT ] accept this acknowledgement slip while applying for Auto / House loan.

3) How does banks used to verify these Acknowledgement slips ?

after efiling of return there is an acknowledgment which is sent on your email ID from CPC Bangalore that the signed copy of the return has been received and hence your filed return has been accepted. Therefore for those returns which are not digitally signed this acknowledgment alongwith the filing receipt would form the complete evidence that the return have been filed.

for those return which are digitally signed such acknowledgment does not come.

 

[piyushonline]

Dear Diosys,
I am a salaried employee. I receive income from rent and interest. I have also made losses under derivatives and have following queries.

1. I have incurred losses in FY 2007-2008, FY 2008-2009 and FY 2009-2010 (havent declared any of those losses)

2. I have paid income tax on the rent and interest received.

3. Can I revise my earlier returns and declare appropriate losses.

4. Can I offset FNO losses against interest, rent etc.

5. Revision of return will attract any penalty ? What is the maximum sum.

Appreciate your response.

Thanks