Im pretty new to trading and ive done f&o trading in high numbers at low profit or gain.
My f&o profit is 25k while brokerage, stt and other charges add up to 15k which i have paid. While filing itr do i have to put my f&o profit as 25k-15k=10k or the entire 25k as taxable business income and pay tax on that based on tax slab?
Your tax liabilities are calculated post brokerage, post STT and charges paid. Additionally, you can claim depreciation of your trading computer, wifi bills, mobile bills, some part of your electricity bills as your trading expenses.
The best way to save on taxes is to first hit the taxable ₹7.5 lakh mark. If you manage of generate ₹7.5 lakhs of profits, get yourself a CA at some ₹5000 and save lots on taxes.
If you have other income that pushes your income beyond ₹7.5 lakh. I’d advice to get a CA.
Good luck. Prioritize on the ₹7.5 lakh income mark and everything else is secondary at this point.
2 Likes
Hi @Yohan,
You need to enter the entire profit as business income. You can then enter the amount paid as brokerage, stt and other charges as expenses. These will be deducted from your gross profit and you’ll have to pay taxes only on the net amount.
Here’s a read that covers the details: FY23-24: Step-by-step guide on filing tax return for traders – Z-Connect by Zerodha
2 Likes