What expenses can a trader claim while filing the ITR?

Income Tax Income from Business or Profession
72

Hey, can you please write to us on help@quicko.com so that our team can look into it?

73

And also how we have to show STT on our balance sheet. I am also an owner of Electronics business. Please help?

74

And also how we have to show STT on our balance sheet. I am also an owner of Electronics business. Please help?

75

Hey, you can claim STT as a business income and it won’t be reported in your balance sheet, rather it will be a part of your P&L statement.

77

Thank you for providing the solution

78

Hi, if I give advice to someone on Fno trading and want to charge a fees for this. Can I do that? I do not have any certifications, not am I a registered advisor with SEBI. Is there any rule under which I can charge fees and that person can show it as an expense from the Fno income.

79

Hi @Sumit_Gupta

F&O trading is treated similarly to any other business and hence is considered as Income from Business & Profession(Section 43(5) of the Income Tax Act). Therefore, you will be eligible to claim a deduction in respect of expenses incurred for earning F&O income.
Here’s a read on Expenses a Trader Can Claim in ITR - Learn by Quicko for your reference.

According to Income Tax Rules, you are required to keep proper vouchers, bills in support of your claim for expenses and maintain proper books of accounts for F&O business.

80

Hi, thanks. Kindly shed some light on other part of the doubt. That is - can a person who is not sebi registered advisor charge consultancy fees for advising on FnO trades?

81

Hi @Sumit_Gupta
Any person who wishes to carry on investment advisory services for its clients should get themselves registered as Investment Adviser (IA) with SEBI
Here’s a read for your reference. Click here.

Hope this helps.

82

I recently got a Monitor for personal use which I also use for trading purposes.
Can this be treated as a business expense for my F&O trading ?

83

Hi @siiddd,

Considering a monitor as an asset, you can claim the depreciation as a business expense.

84

In general for any asset, Which is more beneficial in terms of tax? Buying/subscribing?
Are there any limitations to show subscription amount as business expense?

85

Hello @bharath_kumar,

Depreciation is allowed on Fixed Assets owned by assessee under Income Tax Act, 1961 which is calculated based on the cost of asset as per the rates mentioned in the Income Tax Act, 1961 you can refer the method of depreciation as well as rates in the link below.

However, when you take assets on lease or hire-purchase, the entire cost of asset is not allowed as deduction in the form of depreciation but the lease rentals paid for the asset are allowed as deductible business expense. If the payments are made to a person who is relative then excess payment is disallowed under Section 40A(2).

For any general asset, you need to consider the cost, rate of depreciation vis-à-vis the lease rentals paid on the same to identify which of the option is beneficial to a particular case.

Hope it helps!

86

I am individual professional trader in my personal account and huf account .

If i buy a car in my personal name or huf name . Will i get expense deduction and claim depreciation decduction ?

87

Hi @HIREiN

Depreciation is not for individuals but for businesses, if you incur expenses/use the car for business purposes, you can claim depreciation.
Read more about Expenses a Trader Can Claim in ITR - Learn by Quicko & Depreciation under Income Tax Act - Learn by Quicko

88

As 40% depreciation is by WDV, how can one account for the residual value of the asset?

89

Hello @gdshan,

You can calculate the residual value of an asset by applying the rate of depreciation applicable to the asset and reducing it from opening WDV.

90

Hi

Thanks for clarifying. When does the value get extinguished so as not to claim any further depreciation? Since depreciation is on WDV, is there a provision to claim the residual value in its entirety after a certain number of years?

91

Hi @gdshan,

Depreciation can be claimed till the value of the asset becomes nil, however, if the WDV is nominal and you don’t wish to claim depreciation on that then you can report opening WDV as deductions during the year. You can not claim residual value in its entirety.

Hope this helps!

92

HI,
I had below questions

  1. My son had taken loan from bank of around 10L and gave the amount to me. I used that amount in FNO . How to claim the interest paid by him to bank as expenses in my fno trading. Any process need to be followed or directly i can claim the interest as expenses while filing ITR
  2. For FNO i need to pay subscription charges, profit sharing to third party website. To claim these charges as expenses in ITR, do i need to pay these amount from my credit card or savings account or an add on credit card of my son original credit card