Tax liability on commodity income

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 February 2013 Dear Sir,

I m dealing in Commodity trading on a daily basis or short term basis simultanously. I Want to know that as per income tax point of view, in which head my tax liability falls. It is Business income / short term capital gain or both. what is the tax rates are levied. as on date current f.y. my. Turn over is approx. 11 crore.

CA Mahavir Shah

CA Mahavir Shah (Expert)
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22 February 2013 Commodity Incomes are classified under the head Business & Profession.
It will be considered as your Business Income only even though you had traded on daily basis as well as short term basis.
Moreover as you have already crossed turnover of Rs.1 crore, you are liable for Tax Audit u/s 44AB.

CA Mahavir Shah

CA Mahavir Shah (Expert)
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22 February 2013 Tax Rate would be normal rate i.e as per normal slabs of income tax.

CA SAYANTAN BASU

CA SAYANTAN BASU (Expert)
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22 February 2013 Dear sir ,
With the insertion of Section 43(5)(d), eligible transactions on notified stock exchanges have been rendered non-speculative in nature. So far only BSE, NSE and MCX-SX have been notified for this purpose. Therefore, trading in commodity and equity derivatives traded on stock exchanges other than those mentioned above, is still treated as speculative, the loss wherefrom cannot be adjusted against any other sources of income...

So in that case commodity trading will be considered as speculative business income ... So all the speculative business income will be casual income to be taxed at normal business rates
Hope this will solve your query ....

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