Ask us anything about taxation on trading and investing

#1

Quicko is a tax planning, preparation & filing platform. Zerodha has partnered with Quicko to simplify your Tax Compliance needs.

Shoot your questions! We are here to answer all your tax-related queries for Equity, Intraday, F&O or Commodities Trading.

You can also get in touch with us on help@quicko.com.

5 Likes
#3

i’m a recent graduate and traded some 200 lots of usdinr, the turnover is above 2cr. I don’t have any income except for pocket money i receive and some tutions i give. after totaling everything my income is not above 2.5 lks and yes i’ve been in net loss in my usdinr contracts. so my question is do i’ve to file itr or audit or something like that?

#4

I have traded multiple brokers and eligible to audit. My accountant advised creating separate profit/loss account for all broker and one consolidated profit/loss and balance sheet. Is this treatment correct?

#5

Hi,

Yes, you are required to file ITR and get your books of accounts audited since your turnover is more than INR 2 crore and you have losses.

You can carry forward the losses to the next 8 financial years by filing your ITR. This loss can be set off against your future profits.

In case you need any assistance, here is our plans for the same:

#6

Hi Prakhar,

This treatment is valid. Creating separate P&L will give you clarity on the total earnings from a particular account.
Do keep in mind that in your ITR only the consolidated P&L and Balance Sheet needs to be reported.

#7

Paying advisory fees is my expense to make profit from share market .

And also

I take borrow money as loan investment from friend and deploy that money in stock market and make profit and pay interest and share profit to the lender investor.

So ; can i deduct those all expenses from my income ?

Awaiting for the reply…

#8

Hi,

You can report your trading income under the head ‘Business and Profession’ while filing your ITR, and claim the advisory fees as your business expense. You can also claim the interest paid as a business expense. Since the loan is taken to earn the trading income.

#9

@Quicko How advance tax should be paid by a trader since he didnot know how much he would be earning at the end of financial year?

#10

Thanks, also I want to ask is it compulsory to include my personal assets like land in my balance sheet or is it okay to include only those assets which were used in business like cash in hand , car , laptop etc.
I traded on my individual name only .
Also my accountant was saying that there is some issue of reporting GST while audit or ITR but since it is not applicable to traders he advised to submit the return without any gst particulars and if notice comes we can reply them.

#11

my income is less than 2.5 lakhs that’s why i asked and i don’t want to offset these losses in future do i still have to go for audit?

#12

Console Zerodha is showing 3.26lakh option turnover under tax p&l report.Do I have to file return…

#13

Hi my f&o turnover is more than 3 cr, and I am in net profit, do I require audit?

#14

Is there any limit to claim the inerest percentage?
Also. If i shared the profit with the lender investor; can i also deduct those all expenses from my income ?

#16

My turnover is above 1 cr, but I am having total loss of 1 lac. Do I need an audit ?

#17

You should file the ITR since your turnover is more than INR 2 crore, and according to the income tax guidelines a tax audit is required when:

  • Losses from business income (Intraday & F&O trading)
  • Turnover more than INR 1 crore
  • Profit is less than 6% of the total turnover

In case turnover is high but the ITR is not filed, there are chances of receiving a notice from the income tax department.

#18

What’s the taxation on cumulative bonds (NCDs) held for over a year?

#19

Hi Ishaan,
Yes, you should file ITR-3 and report this income under the head “Business and Profession”. You should also prepare your financials and submit them with your ITR.
Since your turnover is less than INR 1 crore, you are not required to get tax audit.

#20

Hi Yash,
Yes, you are required to get a tax audit since your turnover is more than INR 2 crore.

#21

Hi Rahul,

Since it is not possible to estimate total income for a year from beginning. You can make payment of last installment of advance tax after looking at the total income earned upto March and avoid interest penalties. It is always a good practice to make payment of advance tax since any additional tax is paid can be claimed as refund while filing ITR.

1 Like
#22

You can claim the actual interest amount paid as an expense. Also, keep in mind the interest rate should in line with the market rate.
Secondly, you cannot claim the profit shared as an expense.