I want to start pvt limited company for F&O trading, is there any rbi rule that if more than 50% income is from this activities then it needs to be registered as NBFC with rbi? I want to take benifit of car and other assets depriciation from the profit. Pls share information if anyone has.
If a private limited company is engaged solely in F&O trading, it needs to obtain an NBFC license from the RBI. According to the rules, if more than 50% of a company’s assets are financial assets and over 50% of its income comes from these financial activities, the company must register as an NBFC with the RBI.
For individuals, F&O trading is considered a non-speculative business. This means you can claim all business expenses directly related to your trading activities while filling out your ITR-3.
Hope this helps!
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what about a LLP, bcoz it will be taxed lesser than an individual slab rate
Hi @Manish,
This topic is being discussed in detail here: Can I set up an LLP for trading?
Let us know if you have any further queries.
But for nbfc registration net owned fund is 2 crore minimum. How to get registered with lower capital? Many pvt limited doing only trading without nbfc license. After nbfc registration there is hige compliance formalities. Pls give some more information apart from what is available on google.
Yes, NBFC registration might need net owned fund as prescribed by the act. It is not possible to get license without adhering to the same laws.
While some individuals or entities may engage in trading without the necessary NBFC license, failing to comply with these legal requirements can lead to serious repercussions.
Thus, we do not recommend to do so.
Thank you.
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