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

[lazytrader]

Hi Diosys,
I wanted to know which documents do I need to maintain regarding my trading from income tax perspective? I believe no document are requited to be submitted when filing returns on income from trading.

I get a lot of documents from my broker like Client Margin, bill detail, contract notes, ledger confirmation etc etc. I keep all those but now I am thinking of getting rid of the old unwanted ones.

Thanks in advance.

 

[trader31339]

Diosys,
1)
Suppose , I buy shares of Reliance Industries ltd. (RIL)
After buying RIL , in delivery , I trade in RIL in intraday and FNO. If after 12 months I sell RIL , then the profit will b treated as long term capital gain?????

2)
How can an individual maintain seprate book of accounts for trading and investment ? please help.

Asking these questions for general knowledge and educational purpose.

 

[jaigurudev]

Dear Sir

I am a salaried individual in the highest tax bracket.

Planning to start trading in Nifty options in my wifes trading and demat account.I understand from one of your replies here that if the money source is from my income then even the profit in her trading a/c will be clubbed with my salary income.

I had read somewhere that if I sign a loan agreement with my wife stating that the trading capital money I gave her is a loan on low interest then the trading profit will not be my tax account.Is this correct and can I go ahead and do the trading on her a/c using this rule?

If that is correct can I do the same trading from my mothers a/c as well?

Thanks in advance.

jai gurudev!

 

[asko]

Thanks Diosys for this excellent thread.

My search didn't turn up any posts so this may be a repeat. apologize for the trouble.

I'm holding a share (with plans of holding it for loong term) for a nearly an year now, and I'm in loss right now, and just before a year completes and it becomes a long term capital loss, I want to sell and buy the same stock so I can book short term loss.

Is it possible to sell the stock and buy the stock on the same day and show it as Short term capital loss. Or is it necessary for delivery to happen? With Intraday, I can save some money on brokerage.

 

[shanki99]

Diosys,
1)
Suppose , I buy shares of Reliance Industries ltd. (RIL)
After buying RIL , in delivery , I trade in RIL in intraday and FNO. If after 12 months I sell RIL , then the profit will b treated as long term capital gain?????

2)
How can an individual maintain seprate book of accounts for trading and investment ? please help.

Asking these questions for general knowledge and educational purpose.

I think the IT dept takes things in FIFO method. RIL cash intraday is different from FNO. Better to maintain 2 different trading accounts for Delivery and trading so that ambiguity doesn't set in

I suggest u take a look here http://www.traderji.com/taxation-ma...pay-income-tax-trading-profit.html#post392974

 

[diosys]

I think it is better not to file income tax instead of showing such expenses. It is a sure shot invitation for trouble. If you don't file tax at least you can plead ignorance.

What you are saying is exactly the opposite of what i was going to say !!!

Without filing of proper ITR you can never plead ignorance !!! There is a very well accepted maxim in law " IGNORANCE OF LAW IS NO EXCUSE"....

Returns should always be filed even if the income is nil

 

[diosys]

Hi Diosys,
I wanted to know which documents do I need to maintain regarding my trading from income tax perspective? I believe no document are requited to be submitted when filing returns on income from trading.

I get a lot of documents from my broker like Client Margin, bill detail, contract notes, ledger confirmation etc etc. I keep all those but now I am thinking of getting rid of the old unwanted ones.

Thanks in advance.

Maintain books of accounts (ledger & cash book, contract notes) for minimum 6 years from the end of the Asst year.

That is legal, though i would urge everyone to keep atleast their ledgers for the LIFE !!!

 

[diosys]

Diosys,
1)
Suppose , I buy shares of Reliance Industries ltd. (RIL)
After buying RIL , in delivery , I trade in RIL in intraday and FNO. If after 12 months I sell RIL , then the profit will b treated as long term capital gain?????

2)
How can an individual maintain seprate book of accounts for trading and investment ? please help.

Asking these questions for general knowledge and educational purpose.

Yes that would be long term

Miantain two seperate demat accounts....that is the best possible way

 

[diosys]

Dear Sir

I am a salaried individual in the highest tax bracket.

Planning to start trading in Nifty options in my wifes trading and demat account.I understand from one of your replies here that if the money source is from my income then even the profit in her trading a/c will be clubbed with my salary income.

I had read somewhere that if I sign a loan agreement with my wife stating that the trading capital money I gave her is a loan on low interest then the trading profit will not be my tax account.Is this correct and can I go ahead and do the trading on her a/c using this rule?

If that is correct can I do the same trading from my mothers a/c as well?

Thanks in advance.

jai gurudev!

It cannot be normal or marginal rate of interest it can only be full rate at which a bank would normally lend.

12% can be safely assumed to be the prevalent rate since that is the rate of Income tax percentage also.

 

[diosys]

Thanks Diosys for this excellent thread.

My search didn't turn up any posts so this may be a repeat. apologize for the trouble.

I'm holding a share (with plans of holding it for loong term) for a nearly an year now, and I'm in loss right now, and just before a year completes and it becomes a long term capital loss, I want to sell and buy the same stock so I can book short term loss.

Is it possible to sell the stock and buy the stock on the same day and show it as Short term capital loss. Or is it necessary for delivery to happen? With Intraday, I can save some money on brokerage.

It has to move out of your demat for a day atleast....Intra day would not suffice