List of expenses a trader can claim

Income Tax Income from Business or Profession
,
61

Thanks so much for this useful and detailed information, Muskan!

62

What portion of house rent and internet expenses be claimed as a deduction?
Assume im living alone and pay a rent of 35000 per month and an internet bill of 3000, can the total amount be deducted from gross profit from intraday trading?

63

Hey @xyztrader,

If you are a full-time trader and have set up a separate space for trading purposes, you can claim the amount of rent and electricity bill proportionate to the space being used for trading as an expense.

1 Like
64

Hi - I am a trader trading on Indian markets but I am residing outside india. Can I claim my expenses that I incurred outside india as business expenses ? eg. rent I paid in a foreign country for premises that I used for trading Or say internet expense ? These expenses are incurred outside india and I have supporting documents for those

65

Yes, these expenses can be claimed provided they were incurred for the purpose of the business, which is trading in your case.

66
  1. I am a salaried person and have Income from my Salary.
  2. I have LTCG, STCG and Intraday Profits as income.
  3. All charges in the broker’s TnL report can be claimed except STT, right? Can I show DP charges and AMC charges in Expenses? If yes how to assign AMC to LTCG/STCG/Intraday? What about STT on Intraday? Difference b/w Expenses pulled in CLEARTAX vs QUICKO is huge.
  4. I don’t think I can use depreciation on my laptop, right? I use my laptop for personal work and official purposes, too.
    @Surbhi_Pal
67

I have the same queries as this and also few more -

  1. While importing tax data from Zerodha , I would expect Quicko to automatically import expenses like STT . If that be case do we still need to capture it again under the Duties and taxes head of Expenses section of Business income ? Wont it lead to double counting ?
68

Hi,
Can ones medical insurance premium be claimed as an expense under the header INSURANCE?

69

Hi @Lokesh_Singh,

You can claim all the charges for intraday income. For LTCG and STCG, charges except for STT can be claimed.

Moreover, depreciation can be claimed on assets, however, such assets must only be used wholly for your business which is intraday trading in your case.

70

Hi @hpant,

Yes, we do import all your trading expenses as available in the broker reports. You do not have to add these again.

71

Hi Have Capital Gains from sale of Mutual funds and stock ,
have interest on Loan, can I claim interest expenses ?
please provide your contact to take support in ITR filing.

72

Hi @Satish_Kumar_Sanka

Any expenses can be claimed against profit if the income is chargeable under the head “Business & Profession” and not if treated as Capital Gains.

Thus, if you are a trader and do trades in volume then you can report CG from MF and Stock as Business Income and claim Interest paid on loan as expense against the profit made from those trades.

You can book a slot using the below link to get help for tax filing from our tax experts:

Book a meet

You can also reach out to us on 7575831310 for any help related to tax filing.

Thank you.

73

Dear team,

I want to start a new business of managing my and my relatives stocks portfolios from respective accounts. I will be the only one who will be doing stock trading (intraday) on behalf of other 2 clients. For this planning to buy following assets. can I claim the depreciation of the same in ITR?

Assets -

  • laptop - for all the trading activities
  • 2 monitors - for trading
  • rented office - room at parents House.
  • Car - for visiting clients place almost 2 times a week.
  • Office setup - Furniture setup

Please let me know if I can claim all these assets for my business. Also Please help me understand what is the best type of company (business) I should go for.

  • sole proprietorship
  • One Person Company
  • LLC
  • PVT. LTD
  • Partnership - Where I can ask my brother to help me out with the same.

Also is there any minimum balance I have to maintain for this business (like account turnover) ?
Is there any minimum tax bracket I should have so that I can claim all the above expenses.

Thanks a lot in Advance.

#AskMeAnything #stockTrading

74

Hi @psv,

Yes, you can claim depreciation on the assets that have been used for your business.
However, there are different rates of depreciation for different classes of assets. Here’s an article for your reference. Click here > Depreciation Rates

The type of business, it depends upon the individual to individual. These mentioned businesses have different tax slab rates. You can opt for any of the types of business that is most economical for you.

No, there is no minimum balance required to be maintained for this business. You are just required to report the income earned for the relevant assessment year.

There is no such minimum tax bracket requirement for claiming the expenses.

75

1 Query - In case of an option buyer opting for presumptive taxation, what should be the turnover for the purpose of tax calculation-Is it the absolute Value of Profit/Loss or is sales value also added to it. I could hear there was some update on it. Could you please throw some light?

76

Hey @varun

Turnover for Futures & Options Trading = Absolute Profit.

The turnover calculation for options has been updated based on the eighth edition of the guidance note dated 14/08/2022 (w.e.f A.Y 2022-23). Previously, turnover for options trading was calculated as “Absolute Profit + Premium on Sale of Options.”

Hope this helps.

77

My minor child .
is helping me in earning and making profit . in my sharemarket business .
So . I give her the salary/commission / fees from my profit / net earnings .

Can i deduct this payment as expenses from my earnings . From my net taxable income and save some tax thereby ?
@Sakshi_Shah1

79

Hi @Nishant_Khandelwal,
You cannot claim house rent as an expense for F&O income. However, you can claim a proportionate share of electricity and internet charges based on the space used and time spent on trading activities. Make sure you maintain proper documentation and a reasonable calculation for these expenses.

81

Traders can claim expenses like office rent, utilities, business travel, marketing, insurance, salaries, professional fees, equipment, software, and bank fees reducing taxable income and maximizing legitimate deductions efficiently.

82

If this is the case, you can claim that proportion of rent as an expense, as the space is used solely for trading and you have rent receipts.