I have received a letter from income tax department for non filling return for FY 2012-13 under CIB-502 code of contract of ₹ 10 lac in commodities exchange. But I have never traded in commodities exchange. But in that year I used to do intraday equity trading using 14 X leveraged provide my broker . I deposited Rs. 25000 borrowed from my brother and do many times intraday trading using 14X leveraged . But I never get profit by doing intraday trading that time and lost my 15,000 and withdraw my remaining 10,000 money . I have never profit from it also I only deposited only 25 k . That time I was college student and had no income source . I am very confused now , do I have to pay tax for it??? Please help me and guide me to how to respond to Income tax department . I already response to this notice in compliance section of e-shayog in income tax department site .
you dont need to pay tax as long as your income is below Basic Exemption Limit. as you have replied to the notice wait for further reply from the income tax dept. only thing is you have to show them all the papers pertaining to the trading you have done. dont worry…
Thank you sir for your reply
If you are trading then you need to file IT RETURNS irrespective of profits or losses.
They will come to know that you have done trading but they don’t know whether you made losses.
They will send notice.
Please refrain from posting your PAN details on a public forum and becoming a menace to yourself.
I also get the notice for financial year 2015-16. I have no job after completing my graduation and I have my savings and borrowed money from my brother and friend invested in stock market. I made intraday transaction using that money but never made any profit till now. What will be amount I have to pay IT department regarding this notice and what should I have to take care in future that something like this will not happen again. Please help.
As people have mentioned above, if you are trading/investing then you should file IT returns irrespective of profits/losses made, such that IT dept will know your profits and losses and won’t tax you for something you shouldn’t be.
If you’ve made losses then you can carry forward those losses to some years, depending on STCG, LTCG, etc.
Remember to deduct brokerage and other charges from your profits and show them as Business Expenses, else you’ll be taxed for those charges as well.
Very well explained in these sites, do read comments section as well:
The letter ask me to submit compliance report. Guide me how to fill that. And regarding your answer how only 25k investment counted as commodity market investment of 10 lakh where I only made 7 trades including two bank nifty trades.
Overall trade is approximately 50 thousand.
Firstly, fiscal laws are complex and any violation, even if it is just out of oversight, could result in severe penalties/prosecution. Hence I strongly recommend you consult an experienced CA before responding to the compliance notice.
Regarding your query, in my personal opinion, since it is just a few trades, it can be considered as “Income from Other Sources” instead of “Income from Business” and hence ITR need not be filed since the gross total income in the financial year is less than the exemption limit.
Regarding source of funds, you could probably select the option “gift from family member” (since you mentioned you received the funds from your brother).
This is just my personal opinion and I would strongly recommend you consult a CA before responding to the compliance notice.
Please don’t try to do this on your own, it will only get more complicated.
Find a CA, preferably someone near to your house and ask them to get it done for you.
At current market rates , expect to pay around 500 INR as accountant’s fees.
Hello Mr Gupta
Consolidate the Information like trading reports , Ledger & Bank statements before submitting your response. Once you are clear that there are no financial transaction as placed in the Notice , you can respond by selecting the correct option. These notices are system driven where input from exchanges is matched with ITR filed. The turnover data as per these notices is gross value of Trade which can easily exceed from a single trade itself.
There wont be any tax if you have not earned as tax is on Income.