Hi,
Iam new to trading and trying to understand the tax implications.
From various learning I understand that intraday trading is considered as speculative transaction and F&O trading(intraday and overnight) is considered as non speculative.
Now I would to if any of you can make me understand the difference that if I chose to opt say to trade in reliance equity stock as intraday trading and same stock as futures for intraday trading from tax angle.
In short what is the difference between speculative and non speculative transaction as in above case.
Reliance Intraday trade - Speculative since Equity market is considered Delivery based & u r dng intraday trade in Equity.
Futures Intraday trade - NonSpeculative as Futures(Derivative) market is Contract based which is considered as business. U r trading a contract in the intraday.
Hi Suraj,
Thanks for the reply.
If iam planning to do contract ie futures for intraday, same is considered as non speculative as per your reply.
Now, what’s the difference from tax angle if I chose for speculative transaction ie equity in intraday?
Hope you got the point.
Speculative or non-speculative profits are being taxed based on slabs rates of respective individual …When someone has incurred losses in these segments than the story starts-
Speculative business - Loss can be sett off against only speculative profits (which may be from other source)
Non - speculative business - Loss can be used to sett off against profit of speculative/ non-speculative profits
AND
Losses can be carry-forwarded upto - Speculative losses - 4 Years only
Non Speculative losses - 8 Years only
Hence, if you end of making INTRA DAY losses then you can only sett off with some other speculative business profits or to CF for next 4 years only whereas in case of Fno it can be sett off against INTRA DAY profits (if available) or CF upto next 8 years
Thank you so much Sir.Just want to reconfirm if iam clear with what you said.
1.If I make intraday loss,I can set off that loss only against intraday profit. Correct?
2. If I make loss in FNO, I can set off that loss against intraday profit or even with FNO profit. Correct?
3. In that case Is it opting to FNO as intraday better than equity stocks as intraday considering tax advantage?
If iam clear with above points, I can decide to go with FNO as intraday or equity stocks as intraday.
Thank you so much Sir.Just want to reconfirm if iam clear with what you said.
1.If I make intraday loss,I can set off that loss only against intraday profit. Correct?
2. If I make loss in FNO, I can set off that loss against intraday profit or even with FNO profit. Correct?
3. In that case Is it opting to FNO as intraday better than equity stocks as intraday considering tax advantage?
If iam clear with above points, I can decide to go with FNO as intraday or equity stocks as intraday.
That’s what i was tried to reply…whatever you do in Fno the treatment will remain same…unlike in equity if u do INTRADAY it is Speculative and if u take delivery then it will non-speculative
Thank you Sir for showing your patience in replying to my doubts. A last reply to below will clear my head.
So in FNO if I buy and sell or vice versa in the same day it will be treated as non speculative… Rt?