Getting Started With Trading
Getting Started With Trading
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Em ailaddress:
FullN am e:
In an attem ptto m ake yourtask sim ple and easierw hile ling
yourincom e tax,w e are w riting these seriesofpoststo help
you understand how w e tradersare obligated underthe law to
take care oflling ofourtrading activities.
Sign up
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Stocks sold after holding for more than 365 days Tax
Free
Investm entsform ore than one year(365 D ays)are
considered to be long term and protsarising outfrom selling
a stock afterholding itfor12 m onthsw illbe treated asa long
term capitalgain (LTCG )w hich asperthe section 10 (38)of
the incom e tax actis exem pt from tax provided such a
transaction isdone through a recognized stock exchange for
w hich Security transaction tax (STT)ispaid.Enjoy 100% ofthe
protsyou m ade outofyourlong term investm ents.
Stocks sold after holding for more than one but less than
365 days 15% Tax
Any protarising outfrom selling a stock afterholding itfor
lessthan 12 m onthsw illbe treated asa shortterm capitalgain
and w illbe taxed at 15% provided you take the delivery of
sharesin yourdem ataccount(Exchange hasa settlem enttim e
ofT+2 w orking days,so any stock thatyou boughton M onday
com esin yourdm ataccountonly on the 2nd day from date of
purchase i.e.W ednesday).
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Short Note:
#1.Speculative Trading in StocksorF& O trading requiresyou
to declare yourselfasa Trader.
#2.ProtsorLossesfrom equity trading forlong term orshort
term and derivativestrading w illbe taxed asIncom e from
Business/Profession,iftrading isyouronly source ofIncom e.
#3.Protsw illbe added to yourtotalincom e and taxed
according to yourrespective tax slabs.
#4.Lossesfrom derivativestrading cannotbe deducted from
salary incom e butcan be offsetagainstany otherincom e
(including day trading incom e)in sam e year.
#5.Lossescan be carried forw ard and setoffonly against
non-speculative businessincom e w ithin eightassessm ent
yearsim m ediately succeeding the assessm entyearin w hich
the lossw asrstcom puted.
#6.Businessexpensesincluding depreciation,internetbills,
advisory fees,softw are charges,and m ore.can be offset
againstyourprotsincom e.
#7.ITR 4 should be used w hile lling taxation forindividuals
trading derivatives.
#8.The only thing thatyoullhave to know isw hetherto get
yourbooksaudited ornot.So,Ifyou turnoverforthe nancial
yearis> 1 crore and yourprotsare lessthan 8% ofthe
turnover,you have to com pulsorily getyourbooksaudited.
Butifyou totalincom e isbelow the taxable lim it,then there is
no need to undergo tax audit.
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Short Note:
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For Investors
ITR 1 Individualshaving incom e from Salary and Interest
ITR 2 Individualshaving incom e from salary,Interestand
Rental
For Traders
ITR 4 orITR4(S) Individualsand H U Fshaving incom e from a
proprietorbusinessorprofession
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For C om panies
ITR 6
For
M en/W om en
below 60 years
ofage
For Senior
C itizens (A ge 60
years or m ore
but less than 80
years)
For Senior
C itizens (A ge 80
years or m ore)
Incom e
Level
Tax
Rate
Incom e
Level
Tax
Rate
Incom e
Level
Tax
Rate
Rs.
2,50,000
N il
U pto Rs.
3,00,000
N il
U pto Rs.
5,00,000
N il
Rs.
2,50,001
Rs.
500,000
10%
Rs.
3,00,001
Rs.
500,000
10%
Rs.
5,00,001
Rs.
10,00,000
20%
Rs.
500,001
Rs.
10,00,000
20%
Rs.
500,001
Rs.
10,00,000
20%
Above Rs.
10,00,000
30%
Above Rs.
10,00,000
30%
Above Rs.
10,00,000
30%
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SUBSCRIBE FOR FR
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Traders in India
H ow to use H U F Account
W ith Trading H ow to
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JustTrading
JustTrading.in isa private com m unity oftraders
w ho com e togetherto collaborate,learn and grow
theirtrading skillsand know ledge in a supportive
environm entto m ake Trading A Successful
Business.
JustTrading
7 Com m ents
Taxation
Trading
N ovem ber16,2014
Taxation
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SudhakarJ
August6,2015 at3:33 PM
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JustTrading
August9,2015 at8:50 PM
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D earSudhakar
Incom e tax regulationshad w ide aspectsto
classify yourtrading activity asBusinessor
Investm ent.
Intraday trading (i.e.non delivery trading)is
considered asSpeculative Businessactivity w hich
requiresyou to declare selfasa trader.So any
incom e from equity day trading isspeculative
businessincom e needsto show n underthe head
incom e from business/profession and w illbe
added to yourotherincom e and taxed asperyour
Tax Slab.
There are othercriteria`sto classify selfasa
traderorinvestorlike ifyou are buying and selling
stocksfrequently w ithin w eeksforshortterm or
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G aurav
August17,2015 at7:47 PM
Perm alink
H i,
M y m ain source ofincom e isFD sand Intraday +
BTST + shortterm .Incom e below taxable lim it.StillI
received noticesasking w hy Ihave notsubm itted
returnsforpast2 years.They are referring to m y
above tradesunderSTT-01,STT-02 and STT-03.
So Ihave decided to le thisyearsreturn and Iknow
Ineed to le ITR 4.Please help in providing som e
ITR4 specim en forstock m arkettraders..
Suppose asperportfolio position from backofce I
have:
D elivery purchases= 500000
D elivery sales= 492000
Speculation purchases= 6200000
Speculation sales= 6215000
Totalofpositive and negative valuesofspeculation
entries= 50000
Costprice ofStocksw ith m e on 1 Apr2014 = 56000
(Calculated m y be from lastyearreportsand not
available directly)
Costprice ofStocksw ith m e on 31 M ar2015 =
110000 (Calculated m y be from thisyearreports
and notavailable directly)
M arketvalue ofstocks(available from backofce)
held on 1 Apr2014 and sam e day value = 67000.I
dontnow w hy itisrequired.So Ithink thisisto be
ignored and 56000 isto be taken asopening stock.
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JustTrading
August19,2015 at9:06 PM
Perm alink
D earG aurav
The rstthing w e need to evaluate isthe protor
lossyou had on yourtrading activity separately
forlong term ,shortterm and speculative.So,
considerallthe delivery stocksthatyou sold this
nancialyear(asthere m ustbe som e stocksthat
you purchased lastyearand sold thisFY orsom e
you boughtthisFY butnotsold off)forcalculating
the protorlossand yourspeculative prot&
lossalso.
Asyourturnoverislessthan 1 croresand your
totalincom e isbelow the taxable lim itofRs.2.5
lacs,you are notrequired to undergo the tax
audit.
Allthe intraday protsshould be show n under
speculative businessincom e w hile allshortterm
equity delivery protsundercapitalgainshead.
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Jitendra
August23,2015 at2:26 PM
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JustTrading
August23,2015 at2:28 PM
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D earjitendra
Incom e tax com pliance isgetting very strictthese
days.
So allthe tradersorinvestorsparticipating in the
m arketare required to le theirtax returnseven
ifthe totalincom e isbelow tax lim it.
M any tradersare getting noticesfrom IT
departm entfornon lling orw rong lling of
returnsspecially those day trading,shortterm
trading and,trading f& o asallthe traderstrading
the m arketshave to considertheirprotsor
lossesasbusinessincom e orlosses,so they are
required to le ITR 4 or4S.
Asperlaw ,Electronic ling ofincom e tax return is
m andatory forthe taxpayerifthe totalincom e is
m ore than Rs.5 lakh orifthere isa claim of
refund exceptforsuperseniorcitizen (Age above
80 years)orifITRs3,4,5,6 or7 have to be led
(Rule 12 (3)ofthe Incom e Tax Rules,1962 as
am ended)
Reply
JustTrading
August26,2015 at7:25 PM
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