I am a full time trader &crossed 30% Tax bracket ,How much Tax can i save legally?

Taxation
1

Hi, Team

I have simple query as a full time trader if i cross 30% tax bracket with the Profit income of 30 lacs.

So now i have Tax liability of approx. 7.40 lacs

So upto what extent(%) i can reduce this tax outgo LEGALY,if i show this as Buisness income in ITR-3 ?

2

@Quicko can you.

3

u can claim all the expenses like brokerage, exchange transaction charges, stt, sebi charges and other related expenses to trading like an internet connection/phone bill/softwares(as an asset and claim depreciation)/other subscription services directly related to trading

stt and transaction charges will form a big chunk…and by treating trading as business income…

having said that do consult ur taxation advisor/CA before filing ur return…

4

Hey @sorabh_dhiman

A trader can claim all expenses that are directly related to Trading activity as a deductible. The expenses incurred should be wholly and exclusively in relation to business and professional income.

Read more about expense a trader can claim in their Income Tax Return.

Hope this helps!

1 Like
5

Thanks quicko, i will explore…

6

Hi @Quicko

Is it mandatory to get a tax audit done if the person wants to claim business expenses related to his trading?

Edit: by business expenses I mean expenses related to computer, internet, mobile, etc.

7

Are you sure this will pass?

8

If one trades and earns Rs 100. Pays 30 in charges. Net profit is 70 rs. Now can one further deduct 30rs and the taxable income becomes 40 or it will be 70.

9

Hi @James_Hunt,

Income tax will be calculated on the Net Taxable Income i.e. after subtracting the expenses and deductions.