Best Company To Open For a Day Trader In Options Stock Market

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sidhant

27 Points Posted on 13 April 2011

Hi,

i have been trading options on the nifty index for 3 years now and have gotten pretty good at it.i have been delaying to pay my taxes as of now but from now on i have planned to do everything officially.

i am confused on how i can go about it,i make profits of approx between 2 to 5 lakhs every month.I need to start paying taxes from now on.I want to know should i just go and pay an income tax for my earnings.or should i open a partnership or private ltd firm to save on taxes..i have only 2 more members i can trust to include in my business.the main reason i'm asking this is because i want to show my expences like buying computers,cars,paying rent,electricity and many more bills.currently i have 5 people working under me.

please advise me on how i can show these expences to save on my taxes mainly cause i just cant go and show that i'm self employed and pay huge taxes without my expences getting detucted.as i have said earlier i can have 2 more partners and give them a share also.I just want some advise which would be better partnership or private ltd firm so i can save more money by showing my actual expences and save on taxes.

thanks sid

Replies (8)

Pankaj Arora

Learner

3134 Points Posted on 13 April 2011

Propritorship firm is better option File ITR-4 and claim for expenses if you maintain expenses records than show it in return....

sidhant

27 Points Posted on 13 April 2011

Originally posted by : Pankaj Arora
	Propritorship firm is better option File ITR-4 and claim for expenses if you maintain expenses records than show it in return....

ya but what about my investments like buying computers,cars paying emi's advances for office rent etc...these are all my capital assets right.plus if i pay my partners it will be deducted from my total income right?

Pankaj Arora

Learner

3134 Points Posted on 13 April 2011

all expenses will be deducted but if you have partner in your business and sharing profit equally that partnership firm will be better and first make partnership deed....

Mihir

Wealth Manager

5293 Points Posted on 13 April 2011

Think about proprietorship concern.

Buy car, computer as fixed assets and avail depreciation.

Pay salary to staff including to those 2 partners of yours.

File returns under business and profession.

sidhant

27 Points Posted on 13 April 2011

ok now im confused even more..is it partnership or propreitorship firm mainly to save taxes and what will be the percentage of taxes..any difference?

Pankaj Arora

Learner

3134 Points Posted on 13 April 2011

first decide whethere there is any partner with you... who will share profit equally.... Partnership firm have more paper work in compare of propritorship firm...

sidhant

27 Points Posted on 15 April 2011

Originally posted by : Pankaj Arora
	first decide whethere there is any partner with you... who will share profit equally.... Partnership firm have more paper work in compare of propritorship firm...

hi pankaj,yes i have 2 partners my mom anf sister..i can give them salaries since they are active partners anyway right? and ofcourse after deduction of their salaries the profits will be shared according to the percentages.i mainly want to know how i can save on taxes is which one is the best option to go ahead and what are their pros and cons if u can give me a link with all the info that would be great or if thers not much difference between the 2 pls let me know and i want to know will i have to pay vat every month on the profit earned or does vat not fall under my type of business by trading in the stock markets.

thanks