Bracket Order Tax Head Ache

@siva @nithin. I trade bracket order mostly. Every order i execute, charges are collected EOD, brokerage, stamp, gst, etc etc. Based on total turnover. Again why do i have to pay Income tax? bracket order trade profits are already settled with excluding all the charges. Right?

Please clarify me.

Income tax is different thing, that is on profits.

Those are costs involved in dealing with bracket order.

Any company need to pay for raw materials/fixed costs/marketing expenses etc to sell any product, but they end up paying tax right on the profits they earn?

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You can claim all of these taxes as expenditure when filling ITR form

Wow! Really? Are you sure? Because ive paid more than 2 lakhs so far. @anshabhi

Yes. I am sure

Following are some of the expenses that can be shown as a cost when trading

  • All charges when trading (STT, Brokerage, Exchange charges, and all other taxes). I hope you remember that STT can’t be shown as a cost when declaring income as capital gains, but it can be in case of business income.

As I can guess, your trading volume should be high enough that you will need an audit while filing ITR, so consult your CA for more…

On these forms, @Quicko provides help regarding taxation

Income from trading activity is considered to be a business income as per income tax act. Trader should file Form ITR-3 and report financial statements. Also, applicability of tax audit must be determined. The Due Date to file ITR for FY 2020-21 has been extended to 30th November 2020.

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