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

[Chanakya]

in case of only short term capital gain from shares say 1 lacs or 5 lacs then what will be tax liability for the cases?

 

[diosys]

dear

if some one have income from short term gain only say 1 lacs or 4 lacs this year then what will be tax liability for the yesr?

Chanakya

1 Lac nil
4 lac - 36000

 

[diosys]

in case of only short term capital gain from shares say 1 lacs or 5 lacs then what will be tax liability for the cases?

5 lac- 51000

 

[fjl24]

Hi Diosys

A couple of unresolved doubts from my end.

As per my understanding based on what i have read so far on your thread:

1. Losses from trading in Futures and options segment is to be treated as a business loss.

If what i have stated in 1 above is correct then - In case of any losses from the same can the same be deducted from my other sources of income while computing gross total income?

For instance if i am a salaried employee and i have incurred losses from trading in futures and options can i deduct the losses incurred in 1. above while computing my Gross Total Income before computing taxes for the concerned financial year.

If not then how should i treat losses incurred at 1. above? Is it to be carried forward and adjusted against incomes from the similar trades in the next year?

2. BTST trades - There are various school of thoughts regarding the same.
Is BTST trades to be considered as Speculative or Short Term Capital Gains.

Generally it is said that if we do not take delivery then the transaction is intraday in nature and thus is considered as speculative income/loss.

But technically BTST is a form of trade not facilitated by the Exchanges but the concerned brokerage houses with which we have an account.

In light of the above is BTST to be considered - a speculative trade or one which attracts Short Term Capital Gains?

3. Lastly, can interest paid/accrued for loans taken to do F&O trades too be considered as an expense?

Thanks in Advance
God Bless
Regards
Floyd:thumb:

 

[diosys]

Hi Diosys

A couple of unresolved doubts from my end.

As per my understanding based on what i have read so far on your thread:

1. Losses from trading in Futures and options segment is to be treated as a business loss.

If what i have stated in 1 above is correct then - In case of any losses from the same can the same be deducted from my other sources of income while computing gross total income?

For instance if i am a salaried employee and i have incurred losses from trading in futures and options can i deduct the losses incurred in 1. above while computing my Gross Total Income before computing taxes for the concerned financial year.

If not then how should i treat losses incurred at 1. above? Is it to be carried forward and adjusted against incomes from the similar trades in the next year?

2. BTST trades - There are various school of thoughts regarding the same.
Is BTST trades to be considered as Speculative or Short Term Capital Gains.

Generally it is said that if we do not take delivery then the transaction is intraday in nature and thus is considered as speculative income/loss.

But technically BTST is a form of trade not facilitated by the Exchanges but the concerned brokerage houses with which we have an account.

In light of the above is BTST to be considered - a speculative trade or one which attracts Short Term Capital Gains?

3. Lastly, can interest paid/accrued for loans taken to do F&O trades too be considered as an expense?

Thanks in Advance
God Bless
Regards
Floyd:thumb:

Your understanding is correct but setting off from Salary is not allowed and it can only be carried forward to be set off next year....

BTST is very very thin line walking and can fall either in business or capital gain....If such transactions are regular then it would be business income though not speculative as correctly stated by you...

Yes such interest paid can be considered as an expense which can be set off

 

[fjl24]

Hi Diosys

Firstly, a big thanks for your quick response. I truly appreciate it.

Just extending the discussions a bit further - can i also conclude then that as the losses from F&O segment cannot be set-off against Income from Salaries, then losses from F&O segment cannot be set-off against Income from Other Sources too.

PS: The composition of Income from Other Sources would be - Interest from Bank, Interest from NSC, Interest on Loans & Advances given etc.

Thanks in advance
God Bless
Best Regards
Floyd:thumb:

Your understanding is correct but setting off from Salary is not allowed and it can only be carried forward to be set off next year....

BTST is very very thin line walking and can fall either in business or capital gain....If such transactions are regular then it would be business income though not speculative as correctly stated by you...

Yes such interest paid can be considered as an expense which can be set off

 

[diosys]

Hi Diosys

Firstly, a big thanks for your quick response. I truly appreciate it.

Just extending the discussions a bit further - can i also conclude then that as the losses from F&O segment cannot be set-off against Income from Salaries, then losses from F&O segment cannot be set-off against Income from Other Sources too.

PS: The composition of Income from Other Sources would be - Interest from Bank, Interest from NSC, Interest on Loans & Advances given etc.

Thanks in advance
God Bless
Best Regards
Floyd:thumb:

No you cannot....There is a specific clause which states that business loss cannot be set off against salary income...

For other income including capital gains it can be done.

 

[fjl24]

Hi Diosys

Thanks once again for the quick replies.

Sorry to bother you with some more now but purely related to what you have already replied (more of a clarificatory from my end) - i guess this should be the last in the series.

1. Would you be kind enough to let me know the relevant section/clause as per I.Tax Act wherein it states that business loss cannot be set off against salary income... This will help me in doing the necessary tax planning for myself well before the financial year comes to a close.

2. When you say "For other income including capital gains it can be done" - I would now safetly assume that interest from NSC, Bank and on loans and advances can be set-off agains losses from business (f&o) segment. - Sorry for repeating it just trying to reinforce my understanding. By any chance is there any specific section/clause as per I.Tax which mentions this too.

&

3. Lastly, - When you say "For other income including capital gains it can be done" - what type of capital gains? Is Short Term Capital Gains from cash scrips also a part of this? or does it only cover capital gains other than those earned from the stock markets?

I file my returns on my own and thus these queries. Please don't take it otherwise.

Also, since been started doing some trading my returns have become more and more complicated

Thanks to your thread and replies could manage to file my returns last year with a different sort of complications based on the outcome of intraday trades.

Thanks in advance
God Bless
Regards
Floyd:thumb:

No you cannot....There is a specific clause which states that business loss cannot be set off against salary income...

For other income including capital gains it can be done.

 

[diosys]

Hi Diosys

Thanks once again for the quick replies.

Sorry to bother you with some more now but purely related to what you have already replied (more of a clarificatory from my end) - i guess this should be the last in the series.

1. Would you be kind enough to let me know the relevant section/clause as per I.Tax Act wherein it states that business loss cannot be set off against salary income... This will help me in doing the necessary tax planning for myself well before the financial year comes to a close.

2. When you say "For other income including capital gains it can be done" - I would now safetly assume that interest from NSC, Bank and on loans and advances can be set-off agains losses from business (f&o) segment. - Sorry for repeating it just trying to reinforce my understanding. By any chance is there any specific section/clause as per I.Tax which mentions this too.

&

3. Lastly, - When you say "For other income including capital gains it can be done" - what type of capital gains? Is Short Term Capital Gains from cash scrips also a part of this? or does it only cover capital gains other than those earned from the stock markets?

I file my returns on my own and thus these queries. Please don't take it otherwise.

Also, since been started doing some trading my returns have become more and more complicated

Thanks to your thread and replies could manage to file my returns last year with a different sort of complications based on the outcome of intraday trades.

Thanks in advance
God Bless
Regards
Floyd:thumb:

1.) Sec 71 (2A) and for the second part yes again....it can be done to set off against interest of NSC etc....

Capital gains mean all capital gains be it from stocks or otherwise....

 

[melvyn13]

Hi..

I have been trading in both equity and derivatives market..

I have a profit of 1,00,000 in equity(delivery type)..

I have a loss of 22,000 in F&O..

Can the F&O loss be squared up against equity gain?

what would be the % of tax that i need to pay?