Annual compliance cost of 20000 Rs. is too low for a private ltd company. Clarify the same with Quicko again.
Online tax portals charge 1000 for simple ITR filing on behalf of a salaried taxpayer with no other sources of income.
You could pay salaries to family members which will be taxed at a lower rate. However, the remaining profits in the company cannot be easily cashed out as dividends are taxed according to your own tax slab.
You could be a proprietor and employ staff who are paid salaries. You don’t need to be a partnership or Pvt ltd. You need to take registration of Professional tax if salary exceeds Rs 15k per month (Karnataka). It might differ based on states. In a proprietorship, you as a proprietor can also take a salary.
In a partnership, the partners can also take salaries (limit of 60% of profits) apart from paying salaries to others.
Btw, if you are structuring all of this just to pay salaries where it is not due (illegitimate), if spotted by the IT department can be disallowed completely and can have penalties. Best to avoid all of this just to reduce taxes unless your family members are actually helping you out in the business of trading.
@nithin Is it legal for 4/5 partners to come together form a partnership firm purely for trading equities+FnO, open a partnership demat on zerodha and trade using the pooled money of partnership. What are the possible implications? Can the trader(one of the partners) be paid an additional remuneration(apart from profit share) while others get only profit share? Also considering a 20L profit on 1cr capital what will be taxation on individual partners?(30% will be on firm’s profit I presume). Will be greatful if u reply. TIA.
But is this arrangement legal as the firm will purely trade and no other activities atleast at the outset. Also how easy/hard is it to add capital every quarter or so and eventually even close the firm a few year down the line assuming a shift to llp/pvt co offering other services as well?
@nithin, Zerodha policy on settlement of ITM calls- " * Call/Put options – ITM options get exercised but expire at 0 value. The strike price of the contract will be the buy/sell (average) price of the stocks." Shouldn’t the contract price be the strike price of the call option?
For example, if I hold IDFCFirst 50CE and the expiry price is say 60 (buy/sell average), will I get the shares in physical delivery at Rs50 each or at Rs60 each?
Asking because there’s an opportunity to convert F&O gain into STCG and hence pay lower taxes.
Thanks, @Ragavendran_M. And this delivery is guaranteed? i.e., if the seller of the option doesn’t hold the stock, his broker will compulsorily buy from market and deliver? Or is there a chance that I won’t get delivery?
Yes, the clearing corporation will settle the shares. If suppose shares are not available, the exchange will conduct the auction and deliver to the buyer. even after the auction if the shares are unavailable they will do a closeout. (cash settlement which is very rare).