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

[Star Scream]

Hi,

1. I trade in currency derivatives in NSE. Is the tax treatment and accounting similar to equity F&O?

2. In ITR 4 what must be the code for nature of business. I trade in currency and equity F&O.

3. For expenses can I consider brokerage or only STT, Service tax etc?

4. For how many years can I carry forward loss from business?

5. How do i calculate amount of total stock in trade? If I have open position of 1 lot of Nifty on 31st March then is the total stock in trade closing price of Nifty future multiplied by 50?

Please respond to my queries.

Thanks!

 

[Lopesh]

I am working in an MNC and the taxation on my income is as per my income slab, if I do heavy intraday trading will the income be considered as capital gains or it will be considered as income with normal taxes i.e. 30%

 

[sabariraj18]

I trade thru my NRI frnd's forex account. how wud i get taxed when my frnds sents me from his bank account abroad.. Should my friend pay taxes to India,( since he doesnt have to pay it in his residential country)?. Should he disclose this info to Indian govt necessarily? How much taxes i wud pay wen i recieve the money? please note my frnd is not moving the money to his Indian bank account, hes just transferring it to my account. If both of us have to pay, it means double taxation and i wud get only 50% of funds after taxes. Does any tax treaty works in my case?

 

[a1b1trader]

I am working in an MNC and the taxation on my income is as per my income slab, if I do heavy intraday trading will the income be considered as capital gains or it will be considered as income with normal taxes i.e. 30%

Intraday trading in derivatives (F&O) is treated as business and so income from F&O will be treated as income from business and not capital gains and will be included in your total income and taxed as per your slab. However if you do intraday trading in equities (cash not futures) the income from this will be treated as income from speculation and will be taxed at 30%

 

[kidneyrock]

Could someone help me with this Real Estate tax issue?

My mother would like to sell a very old residential plot in her name. Since she has had this property for 5+ years it would attract LTCG. She wants to avoid this tax by buying a residential house with the profits(as per section 54F).

Unfortunately, she already has 2 houses in her name and therefore she cannot use Section 54F.

However, I have no properties/plots in my name whatsoever. Will it be possible for her to give me the residential plot via a family settlement and then for me to sell it and buy a new house in my name?

My only doubt is, will it be considered STCG if it is sold after being transferred in my name or will it still be LTCG since I only acquire it by way of settlement(ie, not "purchased")?

Thanks in advance.

 

[shobha.chauhan]

Hi say i have Rs1000 of Gross profit from FnO trading and i have say Rs1200 of Goss loss from FnO trading. How will i fill my sales turnover in ITR 4 and arrive at the final net loss of Rs200. Pl advise

 

[vikrit]

Hi say i have Rs1000 of Gross profit from FnO trading and i have say Rs1200 of Goss loss from FnO trading. How will i fill my sales turnover in ITR 4 and arrive at the final net loss of Rs200. Pl advise

for turnover calculation overall gross profit does not work.

calculate gross profit/loss script wise.
say you traded Nifty future Expiry Mar 2012 many times in feb and mar 2012.
and got gross profit for all transaction in THIS script is 400 rs. then this will consider as one entry for turnover calculation.
similarly, calculate gross P/L for each FnO script. then add gross profit values (X) and add all loss values (Y), so your turnover will be X+Y, and your final P/L will be X-Y.

mostly brokers provide this script wise report. ask for it.

 

[vikrit]

Intraday trading in derivatives (F&O) is treated as business and so income from F&O will be treated as income from business and not capital gains and will be included in your total income and taxed as per your slab. However if you do intraday trading in equities (cash not futures) the income from this will be treated as income from speculation and will be taxed at 30%

a1b1trader as per Income tax, trading done thru unrecognised exchanges comes under speculation business. like when we do thru MCX and NCDEX as these are not recognised.
any trading done thru BSE, NSE & MCX-SX (recently got) will comes under business, short term capital gains or long term capital gains only, not under speculation business.

so, delivery based cash(equity) trading where holding for more than 12 months, will comes under Long Term Capital Gains.
any other delivery based cash (equity) trading where holding less than 12 months will comes under Short Term Capital Gains.
all Intraday trading (cash or FnO) from any recognised exchanges, will comes under Business Income.
all types trading from any Unrecognised exchanges, will comes under Speculation Business Income.

 

[shobha.chauhan]

Thanks Vikrit for this. Just a small follow up. in ITR4 for presentation purpose the net loss (x-y as you mentioned) from derivative trading on recognised stock exchange with STT paid will be shown where? under Income from other sources. Secondly in the ITR4 do we need to show the turnover from derivative trading anywhere?

 

[vikrit]

Thanks Vikrit for this. Just a small follow up. in ITR4 for presentation purpose the net loss (x-y as you mentioned) from derivative trading on recognised stock exchange with STT paid will be shown where? under Income from other sources. Secondly in the ITR4 do we need to show the turnover from derivative trading anywhere?

some years before we get extra rebate in tax for STT amount, but now only STT paid amount will not add in income, in simple language it will be consider as expense.
there is no need to mention it separately as it is acceptable untill your turnover less than Audit cap, also broker's reports show final amount after STT,TT,Brok.,ST etc. Still want to then mention in P/L and business details.

turnover, expenses, and profit fill in P/L section.
and also in business details sections where there are separate section for business and speculative business.
i don't fill my ITR myself, so can't tell you page no etc.

one thing i forgot to clarify earlier, take only final outcome of all trades in single script.
so, nifty future march - P/L - 400rs profit - one entry (X1)
and in nifty future feb - P/L - 800 loss - one entry (Y1)

so turnover for these two scripts will be - 1200 rs. and P/L - 400 rs loss.