hmm… very tricky. I know there has to be some product suitability test to ensure people who have no clue don’t risk their entire savings on derivatives. But I don’t think tagging derivative exposure to income or saying no income means you can’t trade F&O is the right way to do this. No agriculturist (who isn’t required to pay taxes today) will ever be able to trade F&O this way.
@Karthik is putting up a questionnaire to determine product suitability that we will get all our clients who trade derivatives to answer. Maybe in the future we would say that people who can’t answer even the basic bits wouldn’t be allowed to trade F&O at Zerodha. Maybe we will ask people to take some tests based on content published on Varsity before allowing to trade F&O.
I think what we will be doing would have been a better way to have don this.
Maybe the above would have been a better way to do this.
I guess we deserve SEBI’s decision, as not many are even aware/caring for the rules that affect their trading, then how do we expect them to protect their capital.
do you trade in derivatives,from when you started, i dont want to file it return bcoz of same reason =income below limit,but people are confusing that not filing may receive notice
@nithin but in any case it will be difficult to implement such harsh restrictions on both the brokers like you and the traders like us as well. isn’t it??
how will it be monitored?? i mean wheather a broker or a trader is following the guidelines given by the SEBI??
I do both derivatives and cash. The problem with IT dept. is that they might not know much about trading and the kind of leverage we get in trading. So seeing that we are trading say nifty (38000 margin ) they might think we are actually trading 10000 *75 = 7,50,000 and that we have that kind of money. Who knows what goes on in the IT dept.
I received a notice last year for not filing IT returns for Assessment Year 2015-16 on my email. I checked on the income tax website and it was showing some transations of f&o and delivery. I don’t know why they singled out only a few trades as I had made many trades that year. Anyway there was an option in the list called “Self-Income from transaction is below taxable limit” i used that option to file compliance on their website.
Inspite of filing compliance, a few weeks later I received a letter by post about the same issue and was asked to reply within 15 days ( i don’t remember the exact time limit) to the assessement officer whose name and address was mentioned in the notice. So i replied that i have already filed the compliance on their website and attached the acknowledgement slip i had received on filing. I sent the letter by registered post and used an acknowledgement card that we get at the post office so that i can make sure that i have proof that i have replied to the notice. After that i have not received any communication from them.
There are Huge data been dumped by various agencies to the Income Tax by way filing of AIR. The agencies includes stock exchanges , Depositories , Banks , Credit card companies etc. Its always better to file return correctly after compiling all the financial information. Income tax can send letter till 6 years back on the basis of above data. By that time we might not have all the information handy. So its better to file even if its loss.
Most probably will have to file this year. But first we need some clarity regarding this sebi decision. eg: if they say that anyone having income less than 2.5 lakh cannot trade derivatives, then we will have to show income more than 2.5 lakhs and pay some tax to be eligible for trading. All depends on sebi decision.
today I have heard something in headline on cnbc awaaz that sebi has framed new rule of Derivative regarding liquidity. what are these can anyone explain
