Tax Return Filing?
Querist :
Anonymous
(Querist) 25 October 2010
This query is : Resolved
Hello Experts,
Is it compulsory to file the return for the income earned from day trading in shares? If i earn rs 50000 in intraday,how much tax should i need to pay?
Thanks in advance
R.Ramachandran
(Expert) 25 October 2010
Dear Anonymous,
Income from Intra-day trading comes under 'business income'. It will be subjected to normal income tax. Tax is not being levied on day to day profit, but the profit as a whole for the entire year. Depending on such income, the slab rate of tax will apply.
Undoubtedly you have to file your income tax return. In terms of Section 139 of the Income Tax Act, Income tax return is required to be compulsorily filed in case
any person has taxable income (i.e. income during the previous year which exceeded the maximum amount which is not chargeable to income-tax).
s.subramanian
(Expert) 25 October 2010
I agree with Mr.Ramachandran.
Sathyan A.R.
(Expert) 25 October 2010
The filing of return of income tax is stated in section 139 of the incoem tax.
If the annual income is above the maxium exempted limit of taxable income you have to file the return of income tax.
Tx liability on intra day transactions are calculated as per TDS rule which provide diferent rate thant the rate of tax provided in parat 1 on taxable income.
So answer is a) the income tx retunr filing depends up on your exceeding annual incomed.
d) the tax is governed by TDS rulein respect of each transaction.
Querist :
Anonymous
(Querist) 25 October 2010
Thanks to everyone,my special thanks to Mr Ramchandran & Mr Sathyan.Now,when a i am allowed to disclose my income under "business",i would like to know,can i claim my expenses?if yes,do i claim taxes like STT also or only allowed to claim Commission & other expenses?
Thanks in advance
R.Ramachandran
(Expert) 26 October 2010
Dear Mr. Anonymous,
Your intraday profit would mean - cost of acquisition of the shares which will include the price of the shares, the STT and brokerage paid thereon, the service tax paid etc. etc.
The net sale consideration received - this would in turn is after deducting from the sale price of the share deductions towards STT, Brokerage, Service tax etc.
Thus, the net sale consideration minus total cost of acquisition would be your business profit in intra-day transaction.
But for conducting this intra-day transaction if you are running an office, employ persons and pay salary etc., then those expenses you can deduct, but you must maintain proper accounts for that.
R.Ramachandran
(Expert) 26 October 2010
Dear Mr. Sathyan,
In the sale and purchase of shares by a day-trader, where does the question of TDS comes in?
Who will deduct the TDS and on what basis?
What is the exact provision applicable?
Please clarify, ofcourse for my benefit.
Querist :
Anonymous
(Querist) 28 October 2010
I am very thankful to Mr Ramchandran for providing me the required solution in simple manner.
Parthasarathi Loganathan
(Expert) 28 October 2010
Professional expertise of Mr.Ramachandran in visible in its true colours with this complicated query through his simple answers. Hats off.
