Share trading

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This query is : Resolved

Vikas Goyal (Querist)

23 November 2014 hi everyone

i started share trading with investment of 20k only, but my daily sale and purchase is around 8-10 lacs. i want to know nature of my trading and is there tax audit is required in this case if my sale and purchase exceeds 1cr

Amol S Joglekar

Amol S Joglekar (Expert)

23 November 2014 Compute the MOD value (difference between sale and purchase of each transaction without mathenatical sign)
That will be regarded as your turnover.

Vikas Goyal

Vikas Goyal (Querist)

24 November 2014 thank you sir will you please explain this

Amol S Joglekar

Amol S Joglekar (Expert)

24 November 2014 purchased 100 Reliance@989, sold @998
900 is the amount to be considered.

02. Sold 100 L&T 1560, bought @ 1580
2000 is the amount to be considered.

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Vikas Goyal

Vikas Goyal (Querist)

24 November 2014 it means actual profit and loss on particular transaction is consider.

Vikas Goyal

Vikas Goyal (Querist)

24 November 2014 should i maintained any books of account or not if MOD value not cross 1 crore

Amol S Joglekar

Amol S Joglekar (Expert)

24 November 2014 Beng into the field of COMMERCE, I would recomend that there is NO substitute for maintenance of books of accounts whether or not it is mandatory.
You can keep the record in EXCEL, with contract notes saved electronically.

Vikas Goyal

Vikas Goyal (Querist)

24 November 2014 thank you sir

Amol S Joglekar

Amol S Joglekar (Expert)

24 November 2014 You are most welcome.
.
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Vikas Goyal

Vikas Goyal (Querist)

26 November 2014 sir plz dont mind.... i asked with various chartered as well many of them tell me that if your sales exceeds 1 crore than your accounts should be audited

Amol S Joglekar

Amol S Joglekar (Expert)

27 November 2014 See, Vikas, either you are NOT disclosing ALL your details to these CAs or you have some preconceived notion about the whole transactions.
Please understand that this is a judgemental call. The act has NOT given it in a neat and tidy manner.
In fact there are LOT of controversies as to whether or NOT share trading should be considered as INVESTMENTs or BUSINESS.
The next in the line is, if it is business, then is it SPECULATIVE.
The answer given by me is based on the assumption that your share trading is SPECULATIVE in nature.

Vikas Goyal

Vikas Goyal (Querist)

28 November 2014 yes sir i am doing trading in speculative manner ...... i sell out all share same day whether price up or down.

Amol S Joglekar

Amol S Joglekar (Expert)

28 November 2014 So you can go by the method as enumerated above.

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