from no where i could get taxation clarification so kindly advise.profit loss from future options and day trading is treated as business profit loss upto this point it is clear.if this is normal business profit loss or speculative profit loss is not clear even to consultants.this has implication for setting off losses as speculative loss can be set off against only speculative gains.businessline says it is normal and has cited a tribunal case ruling.a known consultant says it is speculative as amendment to rules has not been done and circular by tax department is not mandatory and even their own officers do not understand it.to avoid this i depend on delivery based short term trading so that counting is as short term capital gain.till new tax code becomes applicable this confusion will remain.when i talk to investors they say do not bother if it is normal or speculative and fill in return as per your wish no body checks as tax dept is also confused on the issue.
1. Delivery based trading will be rightly classified as short term when held for less than one year. You can pay concessional rate of 15% as tax on such short term gains.
2. Shares held for longer than 1 year are of course tax free. Situation may change after 1.4.2011.
3. Margin trading (without taking delivery) will be classified as speculative transaction and will be taxed at maximum marginal rate applicable to the individual. The losses can be carried forward only for four years and can be adjusted only against speculative gains.
4. Even though derivatives trading too involves no delivery or even intention of delivery, such transactions are treated as `business profits` by a special provision made in the Income Tax Act, 1961.
These gains will be added to other income of the individual and will be taxed at maximum marginal rates applicable to the individual. However, losses under these transactions (total to be netted for one whole financial year) can be carried forward for EIGHT years and can be adjusted against ANY other income except salaries income. Another condition to be satisfied is, such transactions should be carried out through normal brokers/stock exchanges and securities transaction taxes must have been paid on them.
For a definition of turnover, please, visit my homepage and read the caselaw indicated there. Total value of derivatives transactions will not be taken as turnover and Rs. 40 lakhs limit will be applicable only on the premium amount made or lost.
thanks for to the point reply.i feel privileged to find two persons having blogs giving free advice and my judgement is they are doing out of charity.one is ILANGO just nifty blog available as link to vfmdirect dot com.the other one is bramesh technical analysis blog.i believe if boarders help each other with valuable info it adds to knowledge each day.
thanks for reply.banks deduct ten percent as income tax at source on interest of fixed depoists unless you fill form 15g.i want to shift to jaiprakash assiciates fd do corporates also deduct at source tax.kindly advise as this aspect they do not clarify probably due to negative impact on the investor.
Companies like Jaiprakash Associates or Tata Motors are obliged to deduct tax at source (TDS) under Section 194A of the Income Tax Act, 1961, when the interest payable/creditable to the account of a payee during a financial year exceeds Rs. 5,000.
This limit of Rs. 5,000 has been enhanced to Rs. 10,000 when the payment is done by a Bank or a Cooperative Bank.
| NIFTY 
