Trading F&O via LLC or Pvt Ltd

 @nithin @TAXIQ.IN  hi What about the tax rate of a  LLP , Is it 30% or more taxes are levied


Same 30%


How about trading F&O as a sole proprietorship? Does zerodha support account opening in sole proprietorship name?

Also, can I claim back the GST which I pay to zerodha if I trade as a sole proprietorship?


Sole propreitorship is not possible, but as a partnership/pvt ltd company is. No benefit you have by doing this though.


Nithin, just clarifying … If we form an LLP and start trading F&O in it. It is fine. No need to register for NBFC but the moment you invest in stocks (delivery) and the profits arising from stocks and not F&O is more than 50% then technically the LLP has to register as an NBFC.

Income from financial assets constitutes more than 50% ? Does F&O count as financial assets ?

If not, is it not simpler to start a regular partnership firm. The trading in F&O happens in the partnership account while the actual delivery shares / stocks are held in the partner’s DMAT account as the partnership firm can not have a dmat account in its name. Am I correct ?


Yes, definitely easier with partnership. By the way, F & O is defined as trading activity and Equity delivery defined as Investing . Investment Income comes under NBFC norms not trading (so not F&O)


@nithin @TAXIQ.IN Can an LLP with F&O Trading as its objective take loans from individuals for carrying out its business? Any requirements / restrictions on the same?


Under LLP as such there is no restriction on taking unsecured loans from friends / relatives.


Nithin ji by mentioning personal trading business did you mention ITR3?if yes did the govt approve the turnover to be scrip trade wise or by sales price because all auditors say to consider net sales price as turnover which comes in several crores