If Mr. A has, suppose, some other income of Rs. 350000 & speculation gain on shares is of Rs. 200000 and also Short term capital gain tax of Rs. 500000 then, STGL will be carried forward for next 8 years can be set off in future against any STCG.
3.5+2.0 = 5.5 normal income
5.0 income at spl rate @ 15% ( STCG u/s 111A)
In case of speculation income, Rs. 2 lacs will be added to Rs. 3.50 lacs and thus on total of Rs. 5.50 lacs, income tax as per tax slab rate will be calculated.
There are two types of speculation - cash delivery based and F&O based -
any loss from cash delivery based under intraday is speculation and not available for carry forward, it can not be adjusted with any other income except speculation
any loss from F&O based is business loss and available for carry forward upto 8 years max.
Am I right??
Is this speculation income is not chargeable @ 30% special tax rate??
No, speculation income is added to taxable income, and taxed as per slab.
It is not a business of Mr. A but he just trades on day to day to get some income from this. Still he has to file ITR4??
if he has to carry forward the losses for adjustment in subsequent years, then he has to show this as business ( Except LTCG), as carry forward of losses is allowed under business loss only.
I think there is provision for Nature of Business in ITR4. Which option I need to select?
speculation of both catagory comes under business
if he does not want to file ITR 4 then speculation income would go as "income from other sources" and carry forward of losses is not possible.
without taking notice of his 3.5L other income, he is free to select the ITR to filed. but ITR 4 preferred as there is lots of clarity regarding to transactions.