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

[VJAY]

Diosys,
I am an full time intraday trader .some positional also.my capital arround 3-5 lac.some years loss some years gain.but profit not over limitof IT.can I need to file return?If this year I got profit over limit then how can I calculate the amount for tax and which form use for filing IT.Please reply

Regards
VJAY

 

[diosys]

diosys,

Thank you very much for the information but do you know the details/procedure to do that?

Haribird.

Nope...different DP's have different mechanism....Though if you turn the physical shares there is a column there for trfd it....

 

[diosys]

Diosys,
I am an full time intraday trader .some positional also.my capital arround 3-5 lac.some years loss some years gain.but profit not over limitof IT.can I need to file return?If this year I got profit over limit then how can I calculate the amount for tax and which form use for filing IT.Please reply

Regards
VJAY

Dear Vijay....

It is not only profit or loss which determines whether return needs to be filed or not...It is the income as a whole...Moreover of there is a loss in a year and the return is not filed then those losses lapse and cannot be claimed in the future years....Hence make it a point...BE SURE TO SUBMIT YOUR RETURNS EVEN IF A NIL RETURN...Be very sure of this....

Calculation of tax is complex for a novice....however to understand try going through this entire threas and you would have some idea....

 

[lvgandhi]

Dear Diosys,
Will you please clarify whether service tax is leviable on Turnover tax for Futures trade turnover. For example, 1 lot of Nifty Future 50 @ 3000, turnover is 150000/= On this turnover tax of .0021% is levied. ie Rs.3.15. Over this one broker doesn't put any service tax, where as other broker charges Service tax. What is the rule as per law?

 

[michu]

Dear sir,

I just started (3 months) intraday trading with RS 5 lakhs. I make atleast 2 trades A DAY. I get approximately 3 thousand profit a day. avg. RS 50,000/month. I anticipate 12 x 50,000 = 6 lakhs/- year

I understand my income tax will come under BUSINESS INCOME.

I trade under my father trading account who is 62 yrs age.

My question is :

1) Should we pay both CAPITAL GAIN TAX and INCOME TAX for this income (my father have no other earning)? if so, howmuch capital gain tax and income tax to be paid. Day trading attracts brokerage and taxes, education cess other levies..while we calculate taxable income, all these to be deducted from total profit to get taxable income?

3) what is the tax liability if I make a profit of 6 lakhs in the financial year?assume i have no other investment which saves tax.

2) If turnover exceed 40 lakh , then it should be audited. HOW TURNOVER IS CALCULATED? is it TOTAL BUY + SALE + PROFIT? multiplied by number of trades.

eg.: 2 x 5 lakhs BUY in a day
2 x 5 lakhs SALE in a day
3000 profit
20,000 LOSS in one year year
15 days trade a month
1 year

so.. ((4 x 5 lakhs) + 3000) * 15 * 12 = 36,540,000 TURN OVER

OR

ONLY PROFIT + LOSS to be summed up?? in my case, (3000*15*12) + 20,000 = 560000 TURNOVER??

I have not given any IT yet. this is just beginning.

Hope you will help me..

Regards
MICHU

 

[diosys]

Dear Diosys,
Will you please clarify whether service tax is leviable on Turnover tax for Futures trade turnover. For example, 1 lot of Nifty Future 50 @ 3000, turnover is 150000/= On this turnover tax of .0021% is levied. ie Rs.3.15. Over this one broker doesn't put any service tax, where as other broker charges Service tax. What is the rule as per law?

Dear LV,

It is not nessecary that all charge service tax on transaction. If one person is below the basic exemption limit then no service tax need to be charged. So it might be possible that one is within basic exemption while the other is not...

Though service tax is not levied on turnover tax since that itself is a tax. Service tax is levied only on the brokerage charged.

 

[diosys]

Dear sir,

I just started (3 months) intraday trading with RS 5 lakhs. I make atleast 2 trades A DAY. I get approximately 3 thousand profit a day. avg. RS 50,000/month. I anticipate 12 x 50,000 = 6 lakhs/- year

I understand my income tax will come under BUSINESS INCOME.

I trade under my father trading account who is 62 yrs age.

My question is :

1) Should we pay both CAPITAL GAIN TAX and INCOME TAX for this income (my father have no other earning)? if so, howmuch capital gain tax and income tax to be paid. Day trading attracts brokerage and taxes, education cess other levies..while we calculate taxable income, all these to be deducted from total profit to get taxable income?

3) what is the tax liability if I make a profit of 6 lakhs in the financial year?assume i have no other investment which saves tax.

2) If turnover exceed 40 lakh , then it should be audited. HOW TURNOVER IS CALCULATED? is it TOTAL BUY + SALE + PROFIT? multiplied by number of trades.

eg.: 2 x 5 lakhs BUY in a day
2 x 5 lakhs SALE in a day
3000 profit
20,000 LOSS in one year year
15 days trade a month
1 year

so.. ((4 x 5 lakhs) + 3000) * 15 * 12 = 36,540,000 TURN OVER

OR

ONLY PROFIT + LOSS to be summed up?? in my case, (3000*15*12) + 20,000 = 560000 TURNOVER??

I have not given any IT yet. this is just beginning.

Hope you will help me..

Regards
MICHU

Dear Michu,

First let me congratulate for your great going in these dicey markets...

Capital gains is a part of Income tax and both are not separate....There is nothing that you have to pay capital tax AND income tax....If you pay capital gains tax then that is your income tax...

Secondly as you have rightly mentioned that you would fall in the business category. In that there is no such thing as capital gains...It is a flat tax based on your income levels...

This is how tax is calculated for FY 2008-09

Income 1-1,50,000 - NIL tax
Income 1,50,000 - 3,00,000 - 10% tax (Rs 15,000 in your case)
Income 3,00,000 - 5,00,000 - 20% tax (Rs. 40,000 in your case)
Income 5,00,000 and above - 30% tax (Rs. 30,000 in your case)

so on Rs. 6,00,000 for FY 2008-09 the total tax liability would be 15K+40K+30K = 85,000 plus 3% edu cess....

Thirdly, in business income all those expenses which you do for earning an income all those can be set off with your income...

Fourthly, the second (summation of profit and loss) is the correct method of determining the turnover for 44AB purposes...

 

[TFL]

Dear Michu,

First let me congratulate for your great going in these dicey markets...

Capital gains is a part of Income tax and both are not separate....There is nothing that you have to pay capital tax AND income tax....If you pay capital gains tax then that is your income tax...

Secondly as you have rightly mentioned that you would fall in the business category. In that there is no such thing as capital gains...It is a flat tax based on your income levels...

This is how tax is calculated for FY 2008-09

Income 1-1,50,000 - NIL tax
Income 1,50,000 - 3,00,000 - 10% tax (Rs 15,000 in your case)
Income 3,00,000 - 5,00,000 - 20% tax (Rs. 40,000 in your case)
Income 5,00,000 and above - 30% tax (Rs. 30,000 in your case)

so on Rs. 6,00,000 for FY 2008-09 the total tax liability would be 15K+40K+30K = 85,000 plus 3% edu cess....

Thirdly, in business income all those expenses which you do for earning an income all those can be set off with your income...

Fourthly, the second (summation of profit and loss) is the correct method of determining the turnover for 44AB purposes...

As said above is it possible to consider my capital gain (NIFTY FUT TRADING) as business income? If so then my expenditures like electricity, internet charges, Data Feed charges(60000 per yr), Broker software fees... can be deducted from turnover?

Please advice...

Thank you,
Hari.

 

[diosys]

As said above is it possible to consider my capital gain (NIFTY FUT TRADING) as business income? If so then my expenditures like electricity, internet charges, Data Feed charges(60000 per yr), Broker software fees... can be deducted from turnover?

Please advice...

Thank you,
Hari.

Dear Hari....

Its not your choice...FUTURES trading has to go to business income ONLY !!!

Further such expenses can be deducted....

 

[TFL]

Dear Hari....

Its not your choice...FUTURES trading has to go to business income ONLY !!!

Further such expenses can be deducted....

Diosys,

Thank you.

1. So my income from FUTURES will be cosidered as business income then the tax will be of 15% flat or like 10,20,30% as usual.

2. Also, If I need to deduct such electricity charges, telephone charges(is it deductable?), Data Feed Charges, Office staff salary (If I have one assistant) then, under what category my single room office/firm should register.

Haribird.