Fire your tax related queries and i would get it solved!!!
Re: Hi Diosys - Query On LTG,STG & Intraday Profits & Losses
Dear Floyd,
No loss is allowed to be set off from salary income....you can carry forward the losses under other categories to be set off against in the nect year incomes....
Rest if you read this and want more clarification then write back...
Hi Diosys
Have started reading your thread from the very begining but guess it would take some time so am writing to you for advice a bit earlier.
Myself and my wife both are deriving our incomes from salaries. I am in the highest tax bracket & my wife is in the lower tax bracket.
We have a combination of both incomes and losses from investing and trading. Details of the same are given below.
Would sincerely appreciate if you could advise us how to go about the same.
PS: - We do not have any long term/short term gains/losses from any other assets during the current year/previous financial year.
Income Structure - Self:
Main source of income - Salaries (highest tax bracket)
Loss from intraday trading - both cash scripts as well as derivatives - Nifty Futures.
Short Term Capital Gains - from shares (invested with the intention of making profits - so sold as and when made profits)
Other sources - interest from bank etc.
Income Structure - Wife:
Main source of income till date - Salaries (lower tax bracket) this would change in the future as she is interested to take up trading as a full time profession. Thus in future her only source of income/loss would be as a Trader/Investor.
Gains from intraday trading - cash scripts
Losses from intraday trading - derivatives - Nifty Futures.
Short Term Capital Losses - from shares (invested with the intention of making short term profits - but sold as stop losses got hit - positional trades)
Other sources - interest from bank etc.
Kindly advise how we should show the above in our respective returns to get the maximum benefits (either as a reduction of tax or as carry forward of losses). Also, can we in our individual returns claim any set offs of the losses against gains from common category - i.e. equities.
Lastly, what treatment needs to be given to STT paid through all the above transactions.
Thanks and Regards
Floyd
Have started reading your thread from the very begining but guess it would take some time so am writing to you for advice a bit earlier.
Myself and my wife both are deriving our incomes from salaries. I am in the highest tax bracket & my wife is in the lower tax bracket.
We have a combination of both incomes and losses from investing and trading. Details of the same are given below.
Would sincerely appreciate if you could advise us how to go about the same.
PS: - We do not have any long term/short term gains/losses from any other assets during the current year/previous financial year.
Income Structure - Self:
Main source of income - Salaries (highest tax bracket)
Loss from intraday trading - both cash scripts as well as derivatives - Nifty Futures.
Short Term Capital Gains - from shares (invested with the intention of making profits - so sold as and when made profits)
Other sources - interest from bank etc.
Income Structure - Wife:
Main source of income till date - Salaries (lower tax bracket) this would change in the future as she is interested to take up trading as a full time profession. Thus in future her only source of income/loss would be as a Trader/Investor.
Gains from intraday trading - cash scripts
Losses from intraday trading - derivatives - Nifty Futures.
Short Term Capital Losses - from shares (invested with the intention of making short term profits - but sold as stop losses got hit - positional trades)
Other sources - interest from bank etc.
Kindly advise how we should show the above in our respective returns to get the maximum benefits (either as a reduction of tax or as carry forward of losses). Also, can we in our individual returns claim any set offs of the losses against gains from common category - i.e. equities.
Lastly, what treatment needs to be given to STT paid through all the above transactions.
Thanks and Regards
Floyd
No loss is allowed to be set off from salary income....you can carry forward the losses under other categories to be set off against in the nect year incomes....
Rest if you read this and want more clarification then write back...
Re: Query on tax liability
Dear Rahul,
That is exactly the point i wanted to make when i wrote the first two or three posts in the thread.....these are only going to be solved by litigations...there is no other way to judge one's intention...
Though personally according to me selling the shares with a day or two would amount to business income and not capital gain as it would be veryt tough to convince any one that you had bought it with an intention to invest for the long term...
Hi Diosys,
Forbid me if i maybe repeating sum of the queries , but the scene after so much discussion is still not very bright
I do frequent buying/selling of shares with arnd 50k to 1Lakh of amount and with an average holding duration of 2-3 days,
Now what i know is that it will come under short term capital gain and will be charged 15% on that. But somewhere i read that if there is a large volume of transactions and frequent dealings and if at the time of purchase the intention is to make quick profit, then the transactions are likely to be treated as business income.
But my question is how can one define this so called intention to make quick profit and if i buy/sell shares 2-3 times a week is this a high frquency? And will doing buying/selling in the same trend will this profit be added to my buisness income.
And if these facts are true then are these facts of frequency and intention being documented by IT department
Regards,
Rahul
Forbid me if i maybe repeating sum of the queries , but the scene after so much discussion is still not very bright
I do frequent buying/selling of shares with arnd 50k to 1Lakh of amount and with an average holding duration of 2-3 days,
Now what i know is that it will come under short term capital gain and will be charged 15% on that. But somewhere i read that if there is a large volume of transactions and frequent dealings and if at the time of purchase the intention is to make quick profit, then the transactions are likely to be treated as business income.
But my question is how can one define this so called intention to make quick profit and if i buy/sell shares 2-3 times a week is this a high frquency? And will doing buying/selling in the same trend will this profit be added to my buisness income.
And if these facts are true then are these facts of frequency and intention being documented by IT department
Regards,
Rahul
Dear Rahul,
That is exactly the point i wanted to make when i wrote the first two or three posts in the thread.....these are only going to be solved by litigations...there is no other way to judge one's intention...
Though personally according to me selling the shares with a day or two would amount to business income and not capital gain as it would be veryt tough to convince any one that you had bought it with an intention to invest for the long term...
Need some more help, Diosys...
1) What the the "Nature of Business" code for a full time active trader, I don't see the option.
2) Also, what's the Nature of Business for someone whose only income was from long term(1 year+) mutual funds?
3) Some items in ITR4 seem to be repeating/contradictory. Like the dividend from a MF, there's a section for it under "Income from Other sources" and also under "Exempt income". Which is right?
4) Similar situation with LTCG, according to "Schedule SI", the special tax rate for LTCG is:
10 or 20% depending on indexing
or 10% according to tax on MFs
or 10% according to income on ltcgs.
Each with its own code. Which one do I use for a long term equity MF? Or do I just fill it in the actual Capital Gains page?
1) What the the "Nature of Business" code for a full time active trader, I don't see the option.
2) Also, what's the Nature of Business for someone whose only income was from long term(1 year+) mutual funds?
3) Some items in ITR4 seem to be repeating/contradictory. Like the dividend from a MF, there's a section for it under "Income from Other sources" and also under "Exempt income". Which is right?
4) Similar situation with LTCG, according to "Schedule SI", the special tax rate for LTCG is:
10 or 20% depending on indexing
or 10% according to tax on MFs
or 10% according to income on ltcgs.
Each with its own code. Which one do I use for a long term equity MF? Or do I just fill it in the actual Capital Gains page?
2.) +1 year income would go in capital gains section and not in business income.
3.) Exempt income is for individuals wherein you should write, other is for corporates and firms.
4.) None...it does not go here...it is exempt income...
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