Expenses a trader can claim

Hi @pavan_gururaj, you can claim the entire actual expense paid by you as rent. If you are eligible for an audit and you have paid rent above 2,40,000 during the whole year then you are mandatory required to deduct TDS. And if you are not eligible for audit, if the total rent paid is more than 50,000 per month, then also you will have to deduct TDS.
Also if your parents are providing any services to the company then you can show their salary as expenses.

stock brokers are having “fat finger trade” insurance .
how can retail individual client have such insurance ?

Hey @HIREiN

This is something that your broker can help you with.
For any help on taxation, you can always reach out to us.

Hello I Have Purchased Laptop & Mobile For Trading During The Financial Year. So Can I Claim All The
Purchase As Expense (30000 + 60000) =90000 For Trading Business. Or I Can Only Claim The Depreciation Deduction 15% For Mobile Phone & 40% For Laptop, (4500+24000)=28500? Please Guide,Thanks.

Hello @Dayanand_Narwade

The laptop and mobile purchased cant be claimed as an expense it needs to be reported as a fixed asset. Though you can claim depreciation on both as expenses in P&L account.

a professional trader can also claim following and deduct from the profit :

Brokerage , Securities Transaction Tax , GST , Exchange Transaction Charges , SEBI Turnover Fees , Clearing Charges , STAMP DUTY , ALIED CHARGES , penalty , interest , etc

BUT . for this he has to file ITR 3 . and declare and upload the balance sheet mandatorily .

If the trader does not want to declare and upload the balance sheet ; he can choose to file ITR 4 .
BUT , in this case
Brokerage , Securities Transaction Tax , GST , Exchange Transaction Charges , SEBI Turnover Fees , Clearing Charges , STAMP DUTY , ALIED CHARGES , penalty , interest , etc"
will NOT be allowed to deduct from the profit !

@Riya_Jain

i am wondering : why majority of the professional traders choose ITR 4 and do not wish to show/declare/upload the balance sheet ?

i am wondering : why majority sacrifice and do not want to show and deduct the
Brokerage , Securities Transaction Tax , GST , Exchange Transaction Charges , SEBI Turnover Fees , Clearing Charges , STAMP DUTY , ALIED CHARGES , penalty , interest , etc"

from the profit ?

i wonder : they are ready to pay more tax . but do not want to file ITR 3 !
?

@Sakshi_Shah1

@Sakshi_Shah1 can you help?

@HIREiN

If a trader does not want to opt for a presumptive taxation scheme and claim all expenses in the ITR, it is mandatory to maintain books of accounts. Since the books of accounts are maintained, he should report the P&L and Balance Sheet in the Income Tax Return.

A trader who wants to avoid the hassle of maintaining books of accounts thus opts for a presumptive taxation scheme without claiming expenses and filing ITR-4.

i took loan from bank Rs.50 lakhs .
traded intraday : 100% online on nse .
turnover is less than 5 crores .
profit is Rs.45 lakhs .
i paid interest to the bank loan Rs.9 lakhs .

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query :

if i file ITR 3 : i have to pay tax on Rs.36 lakhs i.e. (45 lakhs - 9 lakhs) ?
BUT . i have to maintain the Balance sheet ?
Just , maintaining the Balance sheet ; is enough ; or do i also have to upload it and declare my all the assets and liabilities on the online portal of the income tax website ?
do i also have to declare my all inheritance jewelries of Rs. 70 lakhs in my assets while declaring the the balance sheet ?
in short ; do i have to declare and upload all my assets of the life till date on the government portal ?

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if i do not want to declare my all the assets ; then i file ITR-4 ; wherein i have to pay tax on Rs. 45 lakhs ?
i will not be allowed to deduct the interest of Rs. 9 lakhs paid to the banker ?

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am i right ?

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what should i do ideally ?

pls kinldy enlighten !!

@Sakshi_Shah1 can you please help?

Hi @HIREiN

You need to pay tax on the net profit i.e. after claiming all the business expenses. Balance Sheet and P&L are reported in the ITR and the JSON uploaded on the tax website will include a detailed Balance Sheet and P&L. Since you’re reporting financial statements for business income, it is not mandatory to report personal assets and liabilities.

If you opt for a presumptive taxation scheme and file ITR-4, you must report atleast 6% of turnover as income and you cannot claim any expenses against the same.

For futher help, get in touch with one of our tax experts - Ask an Expert

since , the PAN is same as the trading is done in my personal name .
and , you said

then , you also said :

not mandatory to show my all assets and liabilities in the balance sheet !

===

so i am confused .

==

my simple query is :

in ITR 3 ; i can claim interest expense from my profit ; but , need to declare my balance sheet ?

so , is it part/partial balance sheet or the entire life ; assets and liabilities , till date ?

in itr 4 ; i can not claim interest expense from the profit ; and ; no need to show the balance sheet ?

Hey @HIREiN

Since you need help with a specific tax situation, please book a meet with one of our tax experts - Ask an Expert

As a part of this plan, you’ll be able to book a meeting with a tax expert who shall help you resolve all your tax queries.

Just in general :

If in case of loss also ;

Although the PAN is same ;
(Whether audit is applicable or not )
I do not have to declare my personal assets. I can prepare separate balance sheet of my share trading transaction.

Correct?

In ITR 4 . books of accounts not required to be maintained .
Then . How would the taxman come to know what is the actual turnover ?

The taxman has to believe It would be purely on goodfaith and honesty of the assessee and based on the AIS statement ?

Am i right ?

@Sakshi_Shah1 can you help?

Hi @HIREiN

A taxpayer files Income Tax Return declaring all his incomes and paying tax on the same. If there is any misreporting of income, the Assessing Officer has multiple ways to track it and issue notices too. AIS is one such statement that has details about the financial transactions of a taxpayer.

If you have a specific query related to your income situation, please book a meet with one of our tax experts - Ask an Expert