Hello Folks,
I am an NRI who wants to use F&O for hedging , some long term options play etc.,
I read about the taxation impacts and it appears its not that complex. Please correct if I am wrong in these :
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One needs to file ITR3 and show profits/loss as business income/loss
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NRIs cannot avail presumption taxation i.e, Section 44ADA. This means I do not have a compulsion to show minimum 6% or something as profits on turnover.
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Since F&O trading is digital , I do not need audits if I fall within below limits- I will fall within this limits as I do not want to do weekly/daily trading :
"ITR-3 audit for F&O trading is mandatory if turnover exceeds ₹10 crore (with >95% digital transactions) or ₹1 crore (if cash transactions are higher). Turnover is calculated as the sum of absolute profits and losses per scrip plus the sell-side premium for options. "
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All i need to do is maintain books which to be honest Zerodha Legder, P&L , Bank Statements are good enough !
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Now this is where it will get tricky : Since I may use F&O for hedging , i may suffer loss in F&O . Since I am not availing Section 44ADA ,I can actually show this F&O loss without Audit
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F&O Losses can be offset against other business income/ capital gains but not Salary - Again this does not require Audit.
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F&O Losses can be carry forwarded as well without Audits.
So to be honest ,it looks good ! But I am scared that I am missing somethings before I start participating in F&O . Please advice or confirm If I am right/wrong here. Thanks