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Income Tax calculation methods for trader - Experts advice |
acharyams
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Joined: 04 Jul 2010
Posts: 552
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Post: #1  Posted: Fri Aug 16, 2013 10:07 pm Post subject: Income Tax calculation methods for trader - Experts advice |
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My sister has a trading account where she trades in nifty future. She is a house wife.
Can anybody tell how her tax liability will be calculated?
Last edited by acharyams on Sat Aug 17, 2013 6:19 am; edited 1 time in total |
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apka
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Joined: 13 Dec 2011
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| Post: #2 Posted: Fri Aug 16, 2013 10:17 pm Post subject: Re: IT calculation methods for trader - Experts advice sough |
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| acharyams wrote: | My sister has a trading account where she trades in nifty future. She is a house wife.
Can anybody tell how her tax liability will be calculated? |
like a regular income, because it is the primary source of income for "her". |
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beowulf
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Joined: 18 Aug 2010
Posts: 163
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| Post: #3 Posted: Sat Aug 17, 2013 12:03 am Post subject: |
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I too need some basic advice here.
I have a full time job and sometimes trade in FnO.
Is my FnO income considered to be business income, does this have to be audited by a CA. Also in this case, does an individual have to declare assets and liabilities...?
Thanks,
Beo |
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apka
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Joined: 13 Dec 2011
Posts: 6137
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| Post: #4 Posted: Sat Aug 17, 2013 12:11 am Post subject: |
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| beowulf wrote: | I too need some basic advice here.
I have a full time job and sometimes trade in FnO.
Is my FnO income considered to be business income, does this have to be audited by a CA. Also in this case, does an individual have to declare assets and liabilities...?
Thanks,
Beo |
assets and liabilities need to be declared if your main filing of income/return is pertaining to a particular business you do.
i do not know your salary, or earning figures from the market... it depends on what they are and under which head they need to be filed. |
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singh.ravee
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Joined: 12 Aug 2010
Posts: 678
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| Post: #5 Posted: Sat Aug 17, 2013 10:14 am Post subject: Re: Income Tax calculation methods for trader - Experts advi |
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| acharyams wrote: | My sister has a trading account where she trades in nifty future. She is a house wife.
Can anybody tell how her tax liability will be calculated? |
In case of futures trader, one can treat it as business income. business income here is mtm that u get or pay. the net difference of it. one can book expenses like telephone internet and all. whatever remains after that is ur income and pay tax accordingly.
this is how my ca is doing it.
better is to consult ca. |
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vinay28
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Joined: 24 Dec 2010
Posts: 11748
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| Post: #6 Posted: Sat Aug 17, 2013 11:32 am Post subject: |
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f&o income is ALWAYS a business income. Tax audit is required if turnover is 60 lacs or more. However, this is where there is a lot of confusion. Some CAs say that turnover is the sum of gains only i.e. excluding losses while some say it is total turnover e.g. 50*5600 is turnover if one bought/sold 1 lot of NF.
If one buys and sells a stock (and not its fut) in the same day or vice versa, it's a speculative income. |
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jgd008
White Belt
Joined: 12 Jun 2010
Posts: 1
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| Post: #7 Posted: Sat Aug 17, 2013 12:53 pm Post subject: |
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| vinay28 wrote: | f&o income is ALWAYS a business income. Tax audit is required if turnover is 60 lacs or more. However, this is where there is a lot of confusion. Some CAs say that turnover is the sum of gains only i.e. excluding losses while some say it is total turnover e.g. 50*5600 is turnover if one bought/sold 1 lot of NF.
If one buys and sells a stock (and not its fut) in the same day or vice versa, it's a speculative income. |
Hi
As per Guidance Note on Tax Audit - Issued by ICAI
i. The total of favourable and unfavourable differences shall be taken as turnover.
ii. Premium received on sale of options is also to be included in turnover.
iii. In respect of any reverse trades entered, the difference thereon, should also from part of the turnover.
Hope This helps
Regards |
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prabit
White Belt
Joined: 02 Jul 2009
Posts: 133
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| Post: #8 Posted: Sat Aug 17, 2013 2:40 pm Post subject: |
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| jgd008 wrote: | | vinay28 wrote: | f&o income is ALWAYS a business income. Tax audit is required if turnover is 60 lacs or more. However, this is where there is a lot of confusion. Some CAs say that turnover is the sum of gains only i.e. excluding losses while some say it is total turnover e.g. 50*5600 is turnover if one bought/sold 1 lot of NF.
If one buys and sells a stock (and not its fut) in the same day or vice versa, it's a speculative income. |
Hi
As per Guidance Note on Tax Audit - Issued by ICAI
i. The total of favourable and unfavourable differences shall be taken as turnover.
ii. Premium received on sale of options is also to be included in turnover.
iii. In respect of any reverse trades entered, the difference thereon, should also from part of the turnover.
Hope This helps
Regards |
In my knowledge, in f&o turnover is total of profit and loss. |
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apka
Black Belt
Joined: 13 Dec 2011
Posts: 6137
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| Post: #9 Posted: Sat Aug 17, 2013 2:44 pm Post subject: |
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| jgd008 wrote: | | vinay28 wrote: | f&o income is ALWAYS a business income. Tax audit is required if turnover is 60 lacs or more. However, this is where there is a lot of confusion. Some CAs say that turnover is the sum of gains only i.e. excluding losses while some say it is total turnover e.g. 50*5600 is turnover if one bought/sold 1 lot of NF.
If one buys and sells a stock (and not its fut) in the same day or vice versa, it's a speculative income. |
Hi
As per Guidance Note on Tax Audit - Issued by ICAI
i. The total of favourable and unfavourable differences shall be taken as turnover.
ii. Premium received on sale of options is also to be included in turnover.
iii. In respect of any reverse trades entered, the difference thereon, should also from part of the turnover.
Hope This helps
Regards |
thanks, that's good clarity. |
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acharyams
Yellow Belt
Joined: 04 Jul 2010
Posts: 552
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| Post: #10 Posted: Sat Aug 17, 2013 9:09 pm Post subject: |
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| apka wrote: | | jgd008 wrote: | | vinay28 wrote: | f&o income is ALWAYS a business income. Tax audit is required if turnover is 60 lacs or more. However, this is where there is a lot of confusion. Some CAs say that turnover is the sum of gains only i.e. excluding losses while some say it is total turnover e.g. 50*5600 is turnover if one bought/sold 1 lot of NF.
If one buys and sells a stock (and not its fut) in the same day or vice versa, it's a speculative income. |
Hi
As per Guidance Note on Tax Audit - Issued by ICAI
i. The total of favourable and unfavourable differences shall be taken as turnover.
ii. Premium received on sale of options is also to be included in turnover.
iii. In respect of any reverse trades entered, the difference thereon, should also from part of the turnover.
Hope This helps
Regards |
thanks, that's good clarity. |
with one example please, friends. For small traders trading with one or two lots of nifty future or option |
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