Thanks Ritesh. My specific queries are:
1. Being a salaried person and having income from F&O trading, should I be filing ITR-4 to report profit and loss from trading along with salary?
2. Can I offset any net loss from F&O trading against other capital gains, like profits from company stock options or ESPP?
3. Do I need to create account books and get it audited before I file using ITR-4? I read somewhere that this is mandatory even if turnover is less than 1cr and if profit is less than 8%.
http://www.zerodha.com/z-connect/blog/view/taxation-simplified
4. How should I go about filling up ITR-4 myself?
Thanks,
Nitin
hello,
my advice to you is
1. the FNO income is always considered as normal business income (by normal i mean not speculative). hence as and by far the tax treatment goes yes you have to file itr 4 which already has the head to show salary income.
2. that depends on when the ESOP or ESPP are issued to you. if its been more then one year than the profit is LTCG (as such a long holding is considered as investement.) the LTCG is exempt under tax so the profit is not available for set off. if less than one year of holding period than the stcg can be set-off against business loss.
for clarification: yes one individual can hold 2 separate portfolios.
3. undoubtedly there is a requirement to get accounts audited if 8% profit is not shown or to claim a loss in any business by virtue of section 44AD, if your current case i think u have a loss in FNO business hence it will be better to get the accounts audited and claim the loss to be carry forwarded for the coming years.
4. ITR 4 is lengthy form. it takes a long time to fill properly. i would suggest you to download free utilities available on internet for preparation of it returns. physical filing of the form may be confusing.
if your income is above Rs.500000 than efiling is complusory. income here means your total income from all sources.
if you are planning to go for an audit and if u r planning to claim loss and carry forward it to subsequent years than keep in mind that the last date of filling return is 30/09/2013.
if you fail to get accounts audited and fail to file return than you may have to pay penalty for late audit and you FNO loss wont be allowed to carry forward.
i hope i kept things simple and at par with the query.
thank you
CA. Ritesh Bafna
please note: the above are in my professional opinion and same may not agree with other professionals. please use with discretion.