Expenses a trader can claim

Muskan_Balar · January 11, 2023, 12:16pm

If you have incurred any expenses for trading purposes, you can claim those as valid business expenses while filing ITR and for which you need to maintain books of accounts in order to claim such.

Here’s you can read more about it.

Shrutika_Shah · January 11, 2023, 12:34pm

Hi @desa_mx123

Adding to @Muskan_Balar point, books of accounts need not be maintained if you have opted for the presumptive taxation scheme.

Read more about Section 44AD - Presumptive Taxation for Business - Learn by Quicko.

Hope this helps.

gdshan · January 25, 2023, 6:28am

Hi

Sorry for the delayed follow up question. I had purchased a laptop which I use for trading in FNO and other stock market related activities in the year September, 2019. I understand that as per the IT Act, depreciation on such items can be claimed over a period of 3 years which is computed based on which half of a year it was purchased. As the 3 year stipulation has ended for me, can I claim the remaining amount as depreciation for this asset?

Bharti_Vasvani · January 27, 2023, 7:43am

Hello @gdshan,

There is no time limit mentioned for claiming depreciation. As per the income tax act depreciation can be claimed on an asset until the written-down value of the asset is nil after giving the effect of revaluation.

Hope this helps!

gdshan · February 6, 2023, 3:54am

Hi

Is the depreciation, which I have been claiming till last FY, available if I choose the new tax regime. In case its not available, then all the carried forward depreciation and business losses stands excluded?

gdshan · February 8, 2023, 2:59pm

Hi

Please clarify on the above. Also, would short term and long term CG on stocks/MFs/debts continue to attract special rates?

Moxish_Shah · February 9, 2023, 11:22am

Hi @gdshan,

For individual and HUF, if you have business income then you cannot set off brought forward business loss or unabsorbed depreciation under the new regime.
Also you cannot carry forward the same to the extent they relate to deductions/exemptions withdrawn in clause (i) of sub-section (2) of section 115BAC.

You can read about the Changes in Deductions and Exemptions under section 115BAC

Hope this helps!

Moxish_Shah · February 9, 2023, 11:30am

Hi @gdshan,

STCG u/s 111A and LTCG u/s 112A which are taxed under special rates would continue to be taxed under special rates in New Tax Regime also.

Hope this clarifies!

raj50098 · February 10, 2023, 5:18am

I have bought a secondhand good laptop from a relative exclusively for trading purposes. i have paid the money via netbanking to him, but being secondhand there is no receipt for it, can i show this laptop on purchased value as asset bought for business and claim yearly depreciation on it?
please clarify,thanks

Muskan_Balar · February 10, 2023, 7:25am

Hi @raj50098,

Yes, you can claim the laptop purchased as a business expense as depreciation as you have made the online transaction for purchasing the laptop.

Hope it helps.

raj50098 · February 10, 2023, 2:56pm

thanks for clarifying

Aadil_Nakhwa · February 15, 2023, 2:15am

if i have income from intraday trading.
can i deduct brokerage, stamped duty, SEBI, Exchange Charges. in a New Income Tax Regime.

Shrutika_Shah · February 15, 2023, 5:25am

Hi @Aadil_Nakhwa

Expenses that are wholly and exclusively incurred in relation to the transfer of shares are allowed to be deducted from sales consideration even under the new regime. Expenses such as brokerage, stamp duty, sales commission, etc. can be claimed as an expense in your Income Tax Return. All these expenses are allowed as deductions only for the purpose of calculating the Capital Gains. However, Securities Transaction Tax (STT) is allowed as a deduction for business income.

raj50098 · February 18, 2023, 12:32pm

Please clarify Brokerage and stampduty charged by broker should be shown as Expenses in Profit&Loss Account or in Trading Account as direct expense?
Thanks

Shrutika_Shah · February 20, 2023, 5:43am

Hi @raj50098

If trading is your primary source of income, then you can claim the brokerage & stamp duty charges as direct expenses in Trading Account.

raj50098 · February 20, 2023, 6:52pm

Thanks for reply. Please tell
Should broker’s AMC charges and STT should be also shown in Trading Account or P&L Account.
Thanks

Shrutika_Shah · February 21, 2023, 5:37am

Hi @raj50098

Broker’s AMC charges can be shown as an expense in the Trading account.
A trader can claim STT paid as a valid business expense if he/she reports such income as a business income.

Hope this helps.

raj50098 · February 21, 2023, 4:34pm

Thanks, Please tell=
Can bank expenses such as Chequebook issue charges, and atm yearly charges be shown and deducted in P&L Account by the Trader?
thanks

Shrutika_Shah · February 22, 2023, 5:19am

Hi @raj50098

Expenses that are wholly and exclusively incurred in relation to the transfer of shares are allowed to be deducted from sales consideration.

enigma · February 21, 2023, 1:18pm

Hi,

I have STCG which I need to add during ITR filing. But I am little confused on few of the things listed below :

Can I deduct Brokerage Charge, Exchange Transaction Charges, SEBI Turnover Fees, Securities Transaction Tax and Stamp Duty from the STCG value ?
Can I deduct DP charges from STCG value ?

If I can deduct then how to claim these deductions while filing ITR ?