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

[diosys]

i trade in derivatives and equities and now problem is that my CA is askin to take prinout of each and every contract note and i told him that backoffice u get all doc..but frm backoffice which document is req to show to the CA. I am confused becos none of docs really show how much money was put how much trade actually took place how much amount was really taken for trades.

Please guide me how to document all these and basically which files u refer ledger report or some other

and fnally how you calculate gains becos at times we transfer money to broker online so how to manage all this clutter please reply

its urgent:sos:

Is he auditing or drawing up your books ???

If auditing then i beleive the contract notes should suffice as it has all the details mentioned therein....

 

[Zigor]

Sir,

First of all I thank you from the bottom of my heart for this wonderful thread

Thank you so much.

I am a day trader , very rarely i carry positions the next day, i started trading 1 yr ago.

Till date i have put 1.4 lac in my trading acct,

As i am learning to trade since last yr , initially i went down to Rs. 40,000 , but i guess i am working hard to learn this trade.

Thankfully my acct is increasing slightly every month .

Right now my balance is 68,000 and going up .

Let us assume my account goes to 1,10,000 around may 2010.I only deal in cash market.

I want to ask

1. How tax is calculated intraday trading ?
2. When should I file tax ?


Please mention the whole procedure of calculation, I come from a small town and have no one to help me on this topic.

I know I should have searched the whole thread before posting, but as I am working two jobs ,I am unable to make time.

I respect the time you will invest in this post and thank you for it.


Thanx again .

 

[diosys]

hi,
My turnover or gains are not 40 lacs and so i need not worry abt auditing but still he tells me that u need to tk printouts of all the contract notes.So can u please tell me is it necessary to tk printouts of all or just a summary of all available in back office wud suffice.I dont know whether he is drawing books or what i didnt get ...but still for just payin regular tax of options do u need all that ?
pls reply

I dont think printout would be of any help....If by any chance the case is fixed under scrutinty then only th same would be required...

BUT be sure that the notes are available when called for by the department

 

[diosys]

Sir,

First of all I thank you from the bottom of my heart for this wonderful thread

Thank you so much.

I am a day trader , very rarely i carry positions the next day, i started trading 1 yr ago.

Till date i have put 1.4 lac in my trading acct,

As i am learning to trade since last yr , initially i went down to Rs. 40,000 , but i guess i am working hard to learn this trade.

Thankfully my acct is increasing slightly every month .

Right now my balance is 68,000 and going up .

Let us assume my account goes to 1,10,000 around may 2010.I only deal in cash market.

I want to ask

1. How tax is calculated intraday trading ?
2. When should I file tax ?


Please mention the whole procedure of calculation, I come from a small town and have no one to help me on this topic.

I know I should have searched the whole thread before posting, but as I am working two jobs ,I am unable to make time.

I respect the time you will invest in this post and thank you for it.


Thanx again .

The value of of your portfolios does not determine what tax is payable and what is not....Sometimes there might be instances that overall your porfolio value are very less but you might have to pay tax....

Since in your case you are dealing in speculative positions hence this income is taxable under business income head and not capital gains. The quantum of tax is determined on the basis of your other incomes and is not a flat rate.

Tax returns for individuals have to be filed by every 31st July of the next year.

 

[Zigor]

The quantum of tax is determined on the basis of your other incomes and is not a flat rate.

Thankyou So much for showing interest in my question.

Just a small clarification .Might feel stupid.

I get confused whether the tax on intraday (cash market) (let's assume my other income as zero)

1. depends on Profit & Loss at the end of the year ,or
2. total turnover on all the transactions combined.

Also somewhere in this forum you mentioned.

( "pure" day trader is taxed at 30% flat rate )


What do you mean by a pure trader ?


Thanx,

 

[jaigurudev]

Dear Diosys

Thank you for your response.
As mentioned in ready reckoner-"Gifted money there is no tax if between relatives."

Does this mean if I gift money to my wife and she trades and earns profits, the profit will not be taxed as my business income ?

jai gurudev

 

[diosys]

Dear Diosys

Thank you for your response.
As mentioned in ready reckoner-"Gifted money there is no tax if between relatives."

Does this mean if I gift money to my wife and she trades and earns profits, the profit will not be taxed as my business income ?

jai gurudev

The clubbing provisions are over riding those provisions...Hence even if you gift to your wife then also the income earned by her would be yours...

There is a via route to do this transaction....

You gift the money to your wife's mother through an account payee cheque...She in turn gifts your wife (her daughter) through an account payee cheque,,,

This is only a via media and not a fool proof plan... IF the IT dept becomes aware of this (chances of it are remote) then may say the transaction is a sham...

So take your pick...If you are a person who is slightly chance taking go for the second option...

 

[diosys]

Thankyou So much for showing interest in my question.

Just a small clarification .Might feel stupid.

I get confused whether the tax on intraday (cash market) (let's assume my other income as zero)

1. depends on Profit & Loss at the end of the year ,or
2. total turnover on all the transactions combined.

Also somewhere in this forum you mentioned.

( "pure" day trader is taxed at 30% flat rate )


What do you mean by a pure trader ?


Thanx,

I doubt if i would have said anywhere that it would be taxable at 30% flat for individuals...Anyways...that is not he case. for individuals the rate of taxation is determined on other income also...

Tax always depend on your income and not turnover.

There is no definition for pure trader...It can be only said that a person who trades regularly can be termed as a trader...

 

[jaigurudev]

Dear diosys

Thank you for the response.

Is it a good idea to gift money to my mother and trade through my mothers account ?

How is the profit in her account treated ?

Regards

jai gurudev

 

[pasha]

Hi diosys,
Great to see you going strong, this thread is becoming more and more popular.
A question for you.
I'm holding some shares with geojit, would like to sell and re buy through Angel. From the tax point of view, are the shares considered sold even if I buy back in a few days?
Regards,
Pasha