Trading Taxation for Fy16-17 (AY17-18) - Salaried Individual

Taxation
1

Hi,

I have the following scenario for FY16-17:

Salary Income: 10 laks
STCL (Short Term Capital loss) : 3 laks
F&O loss : 5 laks
Intraday gain (speculative) : 25k or 0.25 laks

My question :

  1. should I file ITR4? How to compute total tax liability … will I be able to incorporate the STLC in the same filing?
  2. What is the effective net income computation for me for the FY to be able to understand if I need a audit or not.

Regards
Madhumita

2

information regarding turnover for F&O and intraday is also required to make a decision…
turnover for F&O and intraday is the absolute sum of profits and losses…if you are zerodha client you can get the profit and loss a/c from your a/c which gives information about turnover…

3

Hi Chaitanya,

Turnover for FnO : 65 laks , intraday turnover: 6.62 laks

Rgrds
Madhumita

4

  1. Short term capital loss can be set off against Long term capital gain or short term capital gains…but not with any head salaries in your case, so you can carry forward these losses till 8 yrs provided you file your returns within due date.

  2. f&o losses can be ignored if you intend to not trade again…but it is not recommended as you may get notices from tax department regarding the turnover you have traded. you should file itr3. F&O loss is non speculative business loss…so you can adjust against non speculative or speculative income but not with salary income. as you have intraday income which is speculative income you can set off against it. balance can be carried forward for 8 years .
    you should get audited as turnover is less than 2cr and income less than 8% and total income is more than basic exemption limit. you can claim all the expenses related to f&o trading such as commission, stt, brokerage etc…

  3. intraday trading is also same you can claim expenses, offer your actual income as you’ll be getting audited.

  4. your total income will be 10lakhs only , STCL carried forward 3 lakhs, F&O loss carried forward 4.75lks

  5. you should file itr3. previously itr 3 is only for assessee’s with income from partnership firm. now they have clubbed both into one…

1 Like
5

Hi Chaitanya,

Thanks a lot. But I have one doubt in terms of audit - for this, won’t my total income (just for computing audit requirement) be = (salary income + business income + capital gains income) and if this is less than BEL of 2.5 laks, no audit is required… can you please clarify?

Regards
Madhumita

6

I mention this as per document I read on Zerodha Varsity

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1 Like
7

non speculation loss and short term capital loss cannot be clubbed with salary income… non speculative loss can be set off against intraday profits… so your business income will be 0

therefore total income is above BEL… audit is required…if you dont have any salary income then what you have mentioned hold good…

1 Like
8

so this holds true even if TDS has been deducted by employer from salary. Where can I get this audit done - local CA or any website and what are typical charges plz…

9

Try local CA.
If you want to do online, try cleartax.in
Generate tax report s from Ur broker backend and furnish to ca. Also give form 16 issued by Ur employer.

1 Like
10

Thanks…Yes…I was thinking of cleartax.in … are they reliable and how much will they charge typically?

11

Comprehensive with local CA support 1799. Pl check urself.

12

Thanks Uma… so Cleartax.in review and upload (after paying their fees) will be accepted as proper audit being done by IT department?

13

Yes. No doubt in it. They are reliable.

14

yes…you dont have to pay additional tax for intraday profits as they are set off…only expense you incur is audit fee…

15

@chaitanya_maganti
Which itr to file for salary + f&o?
Itr 4 or 3…?

16

previously itr 3 is for assessee’s who have income from partnership firm and itr 4 is for business or profession now …old itr4 is itr3 and old itr4S ie., presumptive income (8%) is itr4(Sugam)

now you should file itr3

1 Like
17

Thanks sir. It’s now crystal clear.

18

Hello,
I have salried income below 10 lac and plus equity income,which ITR i should FILL?previosly i was filling ITR 1 only.

19

Since you are having Income from Salary and Capital Gains, you can use ITR 2.

20

Hi Chaitanya,

What is the BEL value for FY16-17 (AY17-18)? Is it 2.5 lks or has it been increased. Also, if I have salary income less than 2.5 lks and F&O loss (turnover is approx 5 laks), then which ITR I have to file - ITR3?

Regards
Madhumita