In new tax slab can i deduct intraday share business income expense

Taxation
1

in new tax slab can i deduct intraday share trading
business income expense with Margin Trading Facility interest. like i need to pay Approximate 18% interest for buying share in MTF.
Can i deduct that amount in New Tax slab.

2

From my understanding, this cannot be deducted when in new tax slab. @Quicko please confirm.

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3

all trading expenses can be deducted, its claimable as you are doing business

only the 80c, d, nps, :house: loan etc cannot be deducted

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4

When you buy shares under MTF I guess you will be taking delivery. So the income will be capital gains when you sell. Interest is not deductible from capital gains.

Am not sure how MTF works. So I might be wrong.

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5

see link below, like others have mentioned, Interest cannot be deducted from Capital Gains.

But you are saying specifically “Intraday share trading”. That can be taken as Speculative Business Income (provided you do so and account/tax file accordingly) and therefore your interest IMO can be treated as Trading expense.

I am not a CA/Financial Certified person so you best check with someone qualified.

Short term capital gains: When can I claim deduction on short term capital gains? - The Economic Times (indiatimes.com)

@Jason_Castelino comments on my 2nd para on BI?

6

That’s why I said I do not know how exactly MTF works. From little that I understand, you are taking shares on delivery basis. So it qualifies for capital gains.
If you are treating it as business income then definitely the expenses incurred for the purpose of earning business income can be claimed.
Now this is irrespective of the regime you choose.

7

He says intraday share trading so there is no delivery.

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8

Then why does he want MTF?

9

You will get intraday margin :smiley:

so for eg. i have only 1L cash so max i get 5X which is 5L as per Exch intraday leverage.
but i want additional 10L margin, so i will borrow cash of 2L at 18%p.a interest charged on daily basis.

10

Why can’t you just pledge it for free ?? I believe intra day trade is allowed with collateral pledge.

Again I might be wrong.

11

deleted duplicate post

12

Yes pledging is allowed.
100% pledge value can be used as cash equivalent for intraday.

But i dont have any money OR I dont own shares in holdings that i can pledge OR I want more money over and above what I have pledged.
It is like only borrowing hard cash.

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13

Okay. Then as long as your income in not treated as capital gains, you shouldn’t have problem claiming interest expense.

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15

Ya, but then you don’t get 5X intraday leverage.
So 5X trumps 12-18%p.a. interest

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17

So that was the entire purpose of your post.
Well… Good try but I doubt it will benefit you in any way.

19

Hi @nakhwa.adil @Pai

Yes, you will be able to deduct expenses incurred for intraday trading which will be reported as business income in ITR 3 under the new tax regime with the new tax slabs for FY 2023-24.