Ask us anything about taxation on trading and investing

[Vinay_S]

How much is actual turnover and how much is contract turnover?

[Shivam_Gupta]

Sorry I’ve no idea about it.
@Bhuvan @siva please help me in getting these statements.
How to get these data from console?

[Vinay_S]

Go to console click on reports click on tax p&l and select the years download

[Vinay_S]

3cr is contract turnover or actual turnover?

[vipul_rathaur]

@Quicko @Hiral_Vakil Hi, If i trade Intraday FnO and my taxable income falls under highest bracket, should it be better for me to register an LLP or Pvt. Ltd.?
Also, please highlight the latest tax rate for LLP and Pvt. Ltd.

[siva]

@Shivam_Gupta

please help me in getting these statements.
How to get these data from console?

@Nakul Can you.

[Ganeshbhat1]

Sir i am an agriculturist , i invested stock market around 65000 from may 2019, it is long term and short term investment in zerodha account . So i don’t know what forms i should fill for ITR.

[DA3110]

I am trading very sporadically .There many months I don’t trade at all.I trade in between some days mostly buying Bank nifty options when the premiums are very low
Do I have to file ITR for FNO trading

I have a small business I file ITR for that

[vishvajit_sonagara]

@DA3110

I am trading very sporadically .There many months I don’t trade at all.I trade in between some days mostly buying Bank nifty options when the premiums are very low
Do I have to file ITR for FNO trading

Filing ITR is always a good practice for so many reasons. In case you have traded this past financial year, you should file ITR-3, since F&O trading qualifies under non-speculative business income.

Read more here

Email us details at [email protected] & will assist you further.

[vishvajit_sonagara]

@Ganeshbhat1

Sir i am an agriculturist , i invested stock market around 65000 from may 2019, it is long term and short term investment in zerodha account . So i don’t know what forms i should fill for ITR.

You need to file ITR-2 in case of Long/Short term capital gains. You can do it yourself here. In case you need help, email us at [email protected] & my team will assist.

[Nakul]

The Tradewise Tax P&L on Console has all the data you are looking for.

[Quicko]

@ajax

Hey,

I made loss in F&O and commodity trading, so no matter my turnover I will have to get my account audited. How much does it usually cost for getting an account of salaried individual who traded in derivatives?

Hello,

Since F&O Trading is treated as a non-speculative business income, and you will be required to file ITR-3.
Here is our plan for the same

ITR for Equity, Intraday and F&O Traders

[Quicko]

@skeptic_baba

Hi,

I am 62 yr old and have a turnover of 1.5 cr with 1.5 lac as profit. Do i need an audit for filing tax returns ?

Hello,

Yes, you are liable for a tax audit. Since your profit is less than 6% of the total turnover.
Tax audit is applicable in either of the following cases:

• Losses from business income (Intraday & F&O trading)
• Turnover of more than INR 2 crore
• Profit is less than 6% of the total turnover

[Quicko]

@shashidharb

Is it mandatory to file itr4 if I do f&o trading. Can I fill itr2 and show f&o p&l as STCG.
It is being very difficult to get CA to file itr4 under my budget since I am just a bigineer trader and also I am salaried and my income slab crosses 10%

Hi,

F&O Trading is treated as a non-speculative business for Income Tax purposes. Income from F&O trading should be disclosed under the income head ‘Business & Profession’, therefore you will be required to file ITR-3. You should also prepare and submit financial statements for the same.

In case, you have a negligible profit and you want to avoid filing ITR-3, you may report the income under IFOS i.e. Income from Other Sources. The tax calculation on business income and IFOS income is as per the income tax slab rates. So you would be paying the correct amount of tax. However, if you receive an income tax notice in the future, you must justify why the income has been reported under IFOS

[Quicko]

@Vinay_S

Quicko he tried to say his total contract turnover is 2cr I think not actual turnover pls clarify

Contract Turnover is different from Business Turnover. While Contract Turnover means the sum of purchase value and sales value. It is not considered for income tax purpose.

Business Turnover for F&O trading is the absolute profit i.e. sum of positive and negative differences. This turnover is considered for determining applicability of tax audit and ITR form. If the trading turnover exceeds INR. 2 Cr, tax audit is mandatory irrespective of amount of profits or losses incurred.

[Quicko]

@Shivam_Gupta

Thanks @quicko
I didn’t have turnover more than 2 cr but I booked losses over 3 lacs in this FY.
Which form do I need to file in order to carry my losses forward so I dont need to pay Income Tax next year If I make any profit?

F&O trading is a non-speculative business activity, and hence you should file ITR-3. You are also liable to get a tax audit since there are losses and you wish to carry them forward.

[Quicko]

@PRAKASHCHANDBADJATYA

Zerodha provided intraday & short term profits separately but it does not include expenditures. They don’t provide expenditures separately for intraday , short term & long term. how to show expenditures separately in itr ?

Hi,
You can divide the total expenditure in the turnover ratio and claim it under the respective heads.

[Hiral_Vakil]

@vipul_rathaur

Hi, If i trade Intraday FnO and my taxable income falls under highest bracket, should it be better for me to register an LLP or Pvt. Ltd.?
Also, please highlight the latest tax rate for LLP and Pvt. Ltd

Hi Vipul,

If you register a Private Limited Company (PLC). The tax rate on Company is 25% whose turnover does not exceed INR 250 CR. And no surcharge will be applicable on income up to INR. 1 Cr. Which is less than your current tax bracket. Tax rates on LLP are 30% hence it will not be beneficial to incorporate LLP.

Do keep in mind that you need to see if it is possible to transfer the stocks from your individual Demat account to PLC Demat account. And tax compliances will increase if you incorporate PLC.

[Quicko]

@Kunal_Kothari

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

Hi,

Interest received on NCDs will taxable under the head IFOS i.e. Income From Other Sources. Long Term Capital gains will arise on the sale of cumulative bonds and will be taxed at a special rate of 10%.

[Augustus_Athigaman]

I have a query on advance tax liability

Trading income varies month on month. A trader could have been successful for 11 months in FY but can theoretically lose all the money in the 12 month…

How can we estimate our advance tax liability?