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

[diosys]

Hello Diosys, you are doing a great job in this thread.

My query is related to income tax and capital gain tax.

I am a fulltime short-term trader in FNO.

1. Do I have to pay income tax, capital gain tax, or both?
2. What is the tax rate for short term FNO and equity?
3. Can I offset my FNO profits against losses incurred in non-trading business

If I have to pay both CGT and income tax, how is it calculated?
Ex: Lets say my profit is Rs. 1000 in short term FNO. Assuming 30% CGT, balance amount after paying taxes is Rs. 700. If I have to pay income tax, is it applicable on Rs. 1000 or Rs. 700?

Thank you,
-Bunny.

Dear Bunny,

First thing....Capital gain tax is a part of Income Tax act and is not over and above or levied seperately....

Ans.1) Since you deal in FnO the income which is earned is taxable under business income only and cannot be claimed under capital gains.
Ans.2) Tax rate under business category for indivudals depend in which slabs of income you fall. There is no specific rate of taxation in this case.
Ans3. ) No. Losses under capital gain have to be carried forwarded and set off against income under capital gains only in the subequent years.

 

[bunny]

Dear Bunny,

First thing....Capital gain tax is a part of Income Tax act and is not over and above or levied seperately....

Ans.1) Since you deal in FnO the income which is earned is taxable under business income only and cannot be claimed under capital gains.
Ans.2) Tax rate under business category for indivudals depend in which slabs of income you fall. There is no specific rate of taxation in this case.
Ans3. ) No. Losses under capital gain have to be carried forwarded and set off against income under capital gains only in the subequent years.

Thanks Diosys

 

[justmusafir]

Sir,

First of all Salute to you for doing such a wonder job. I am a salaried person. Made some investments in the shares. I have few questions regarding the calculation of income tax on purchase/sale of shares. Kindly guide:

1. Bought shares of company A at X price. Added shares again at Y price and then again at Z price. Sold within the same financial year on two different rates. Some portion still left. Can I calculate the price of buy and sell after calculating the average price. Whether that will be the price of the remaining shares also which will be carried forward to the next financial year.
2. Bought shares of company A at X price. Company issued bonus of 1:1. What is the cost of all these shares. Here again if I sell some and keep some for the next financial year what will be implications and cost of the remaining shares.
3. I understand that shares bought and sold within one year of the date of purchase are to be paid short term capital gains @10% and for shares held for more than one year no tax is to be paid. Am I correct?
4. Should I include the expenses of brokerage, STT etc paid at the time of buying the shares in the cost of shares and similarly while selling them. In other words can it be deducted from the profits made if any?
5. Can I deduct the losses made by me from the sale of shares i.e. short term loss from the short term gains and Long term loss from the long term gains.

Please excuse if some questions appear as funny, as I am really ignorant about the tax matters.

Regards.

 

[diosys]

Sir,

First of all Salute to you for doing such a wonder job. I am a salaried person. Made some investments in the shares. I have few questions regarding the calculation of income tax on purchase/sale of shares. Kindly guide:

1. Bought shares of company A at X price. Added shares again at Y price and then again at Z price. Sold within the same financial year on two different rates. Some portion still left. Can I calculate the price of buy and sell after calculating the average price. Whether that will be the price of the remaining shares also which will be carried forward to the next financial year.
2. Bought shares of company A at X price. Company issued bonus of 1:1. What is the cost of all these shares. Here again if I sell some and keep some for the next financial year what will be implications and cost of the remaining shares.
3. I understand that shares bought and sold within one year of the date of purchase are to be paid short term capital gains @10% and for shares held for more than one year no tax is to be paid. Am I correct?
4. Should I include the expenses of brokerage, STT etc paid at the time of buying the shares in the cost of shares and similarly while selling them. In other words can it be deducted from the profits made if any?
5. Can I deduct the losses made by me from the sale of shares i.e. short term loss from the short term gains and Long term loss from the long term gains.

Please excuse if some questions appear as funny, as I am really ignorant about the tax matters.

Regards.

Ans 1.) only FIFO method is allowed....What ever came in first goes our first is the presummption...Calculate the closing stock value on this basis.
Ans 2.) for the purchased shares there would be actual purchase cost and hence when sold then abnormal loss. For bonus shares the accquisation cost would be nil and when sold then abnormal profit.
Ans 3.) Yes
Ans 4.) Yes to all.
Ans 5.) Yes.

 

[justmusafir]

Diosys Sir,

Heartful thanks for prompt reply.

Regards

 

[magnet]

Diosys sir if the share hold by me is of say 3 years old..and now i get bonus share 1:1....

Than when i get the bonus from that date to within a year i sell STCG will be aplied on me right or bonus too carry parent share date of purchase?

 

[lazytrader]

Hi diosys, now stcg is 15% right?

 

[magnet]

Hi diosys, now stcg is 15% right?

Yup stcg for trader...but it depends on income tax officer how he sees the person...if he sees too much day trading..or too much trading in a year in your account than he can charge 30% STCg as he sees u doing trading as business

hope i m correct diosys sir

 

[joeblak]

what is the tax to be paid on foreign investment

 

[diosys]

Diosys sir if the share hold by me is of say 3 years old..and now i get bonus share 1:1....

Than when i get the bonus from that date to within a year i sell STCG will be aplied on me right or bonus too carry parent share date of purchase?

it would be from the date of allotment of the bonus shrares and not the original purchase.