I have Rs. 7000 in my trading account, and I did intraday trading using BO for two days, and I received SMS from NSE saying I(PAN No.) traded 9 lakhs and 5 lakhs each for two days. So will this high amount effect in anyway? while filing ITR etc? Is it something to panic?
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Hi @vmanel,
As far as you report the transactions in your Income Tax Return and pay tax (if applicable), there would not be an issue. Also, the source of funds from which you are trading should have been reported as part of income in the current year or previous years.
You can also refer this article for details on Tax Treatment for Intraday Traders.
@Quicko by source of funds, does it mean the margin amount used for trading(7k) from my trading account, or the actual traded value(9 lakhs and 5 lakhs)?
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Source of funds is the amount that you have actually invested for trading. Therefore, in case of Intraday Trading source of funds will be the margin amount used for trading.
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Thanks for the response!
@Quicko
Is trade value is = turn over
Or turn over is different thing
I want to know that trade value is considered for tax audit applicability ?
Trading Turnover is different than Trade value. Trade Value is simply the sum of buy value and sell value of the trading transactions. Turnover is the value of Absolute profit. Absolute profit means the sum of absolute value of profit or loss.
Eg: Profit on Trade 1 is 1000 and Loss on Trade 2 is -2000. Absolute Profit = 1000 + 2000 = 3000.
To determine applicability of tax audit, turnover is calculated.
You can read more about it here - Trading Turnover Calculation for Trading Income - Learn by Quicko
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