Looking for a CA for help in derivative trading taxation

[ritesh.bafna88]

Thanks again. Since there are complications involved in tax audit / ITR-4 filing which I think am not ready for now and I have only booked losses through F&O trading, I am deciding to file only ITR-1 and show only salary income. I think this should be okay since I have incurred only losses in F&O trading and okay with not carrying them forward. I know this would mean loss to me in case of future income from F&O or other capital gains. Please let me know if it is acceptable in terms of IT rules to still file ITR-1 and avoid showing F&O trading losses.

Thanks,
Nitin

hello,

please refer to my post no 29,

as per IT rules no its not acceptable, but in the end to take risk or not purely depends on you my friend.

regards,
CA. Ritesh Bafna

 

[emil16]

Hi Ritesh,

Thanks a lot for your quick response.
Last year, my F&O Turnover is around 5Lakhs only. so even if I consider 8% profit, it will be around 40thousand, much less than taxable limit. So can I skip this year IT Return.
I don't have any other income in that year.

But I have filed business losses(F&O) in the last 3-4 years along with salary income. Not working since last year.

Kindly advice.

Thanks,
Emil



Brgds,
Emil

 

[ritesh.bafna88]

Dear Ritesh,

Thanks for confirming the correctness of filled up ITR4 form. I hope Traderji members benefit from using the above form as a quick reference.

By looking at the form ITR4S, i believe ITR4S is not applicable if a person has Capital Gains/Losses, Carried Forward Losses, Exempt income etc. Please correct me if i'm wrong. As can be seen from PartB-TI-TTI sheet, besides Business Income(F&O) i've another Investment portfolio(Equity Delivery) which has STCG,LTCG,CFL etc. So i suppose i've to go for ITR4 only.

hello,

my apologies i didnt kept other sources in mind.

you are correct you will have to file ITR4.

regards,
CA. Ritesh Bafna

 

[ritesh.bafna88]

Hi Ritesh,

Thanks a lot for your quick response.
Last year, my F&O Turnover is around 5Lakhs only. so even if I consider 8% profit, it will be around 40thousand, much less than taxable limit. So can I skip this year IT Return.
I don't have any other income in that year.

But I have filed business losses(F&O) in the last 3-4 years along with salary income. Not working since last year.

Kindly advice.

Thanks,
Emil




Brgds,
Emil

hello,

yes you can skip filling of return but please keep in mind that if you dont file your return this year than previous losses wont be allowed to be carry forward the same will be lapsed.

regards,
CA. Ritesh Bafna

 

[stockmaverick]

hello,

please refer to my post no 29,

as per IT rules no its not acceptable, but in the end to take risk or not purely depends on you my friend.

regards,
CA. Ritesh Bafna

Thanks again. This is a bit strange, as I have just losses to account for and hence no tax liability.

 

[ritesh.bafna88]

Thanks again. This is a bit strange, as I have just losses to account for and hence no tax liability.

as i said in the post 29, FNO is a business unit and to show losses the IT department demands audit of the same. as your word for IT is nothing to show the losses are genuine the department will rely on audit. all this is by the virtue of section 44AD. here it doesnt matter if you r claiming loss for set off or carry forward.

what the IT department want is either audit or flat 8% profit.

regards
CA. Ritesh Bafna

 

[Jai Mata Di]

Hi, Ritesh,
So, If the gross income is less than 2 Lakh (assuming no other income other than trading) and total turnover (summation of net profit and net loss in derivative trading) is less than 25 Lakh (8% of 25 Lakh is 2Lakh) we don't need to file any income tax return.
Thank you very much Ritesh for all valuable info.

 

[ritesh.bafna88]

Hi, Ritesh,
So, If the gross income is less than 2 Lakh (assuming no other income other than trading) and total turnover (summation of net profit and net loss in derivative trading) is less than 25 Lakh (8% of 25 Lakh is 2Lakh) we don't need to file any income tax return.
Thank you very much Ritesh for all valuable info.

Pls don't get confused. There can be only one gross total income which includes 8% presumed profit.

Regards
CA Ritesh Bafna

 

[Option.Trader]

as i said in the post 29, FNO is a business unit and to show losses the IT department demands audit of the same. as your word for IT is nothing to show the losses are genuine the department will rely on audit. all this is by the virtue of section 44AD. here it doesnt matter if you r claiming loss for set off or carry forward.

what the IT department want is either audit or flat 8% profit.

regards
CA. Ritesh Bafna

This is absolutely true, due to section 44d, it is essential to get audited to carry forward loses. I paid my CA to do it for this year and I have already filed. Better to pay up and concentrate on trades rather than deal with queries later

 

[Jai Mata Di]

Yes Ritesh I was exactly trying to tell you that 2 Lakh is not even including small bank interest (Tax free upto 10,000) thats why said 25Lakh maximum turnover. I completely understand your view, you are a very good CA. :thumb: