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As per the TAX,which way is better to save TAX
From a taxation perspective, trading in F&O as an individual or a company would have different implications.
As an individual, trading in F&O will be taxed as business income. The applicable tax rate would depend on your total taxable income and the tax slab you fall under. The maximum tax rate would be 30% + cess.
Additionally from a compliance point of view, there is no requirement of filing any forms except ITR. Tax Audit would be only applicable if turnover exceeds 10 crores.
And if you choose to trade in F&O as a company, firstly, doing only trading as a private limited company is not permitted. If you wish to engage in trading activities, you would be required to obtain an NBFC (Non-Banking Financial Company) license, which is regulated by RBI.
And the taxes would be levied as per the corporate tax rate of flat 25%. Additionally, companies are required to pay dividend distribution tax at a rate of 15%, which is applicable when dividends are distributed to shareholders.
For a company, the below compliances are mandatory irrespective of turnover and profits,
Hi, I understand that subscription to a trading magazine/platform/software is something a trader can use to claim expenses isnt it? What about trading course fees - can that be used as a business expense for a trader in his/her ITR3?
Any expense incurred wholly and exclusively for the purpose of trading business can be claimed as an expense in ITR 3.
So, even the trading course fees can be claimed as a business expense.
HI, I bought my laptop in 2017 with VAT bill, can i claim depreciation for FY 22-23 ?
If yes how much amount I can claim in ITR3?
Hi, I have Income from Salary + F&O(Loss), can I give salary to my wife (Who is helping me in F&O business) & exempt this salary from my total taxable income?
You can claim the depreciation on the laptop at the WDV for FY 2022-23 for claiming dep as an expense for FY 2022-23/ AY 2022-23.
Also, F&O is a non-speculative business income so you can claim all the expenses incurred for your trading business.
Hi, As I am having Salary + Options (Net loss). If I claim any expenses against F&O business in ITR3, will this reduce my total taxable income including from Salary?
You can claim the expenses and carry forward the loss. You cannot set off losses against salary income.
Salary income will be taxed at the slab rate.
@Shrutika_Shah , Hi actually I am talking about the reduction in total taxable income by showing the expenses for trading business. Is it possible?
Hi, I frequently order online on swiggy, zomato, dominos, etc while trading or planning for the next day’s trades. The total expense for online food orders is more than Rs.60000. Trading is my full-time job. Can I claim this Rs.60000 or a part of it as a business expense (as all transactions are online, debit card or Credit card, will this be sufficient proof?)
@Shrutika_Shah what is the answer for this ? do we need to keep a record of payslip in this case or online transaction proof is enough ?
Hi @Raam_M
You can do both. Having a record of the payslip is just one more proof in case of any notice by the ITD.
There is a pre-requisite.
When you pay salary to your spouse and if he/she is not professionally competent (i.e., whether she/he will actually work or not- keeping that aside)(Whether or not he/she is professionally competent will be verified) (Eg: She working as a professional without the required knowledge is not tenable). In such cases the income so earned or declared in her name will be added to your slab. (Refer Clubbing Provisions for in detail provision explanations)
What about Mother, mother-in-law, father-in-law.
Can I hire them and show the expenses by paying salary at end of year (not as consultant, 194J)
Is it mandatory for them to be tenable even for basic typing work
Should I offer them an offer letter and pay all the money at end of year, or should salary be paid to them each month.
Hi @csteja
Yes, they have to be tenable for the kind of services they are providing. It would be advisable to pay a salary each month.