Day Trading Income Treatment

An Indivudual is deriving his income from Salary, he is also into Day Trading of Shares in a recogonised stock exchange and during the previous year his transactions were approximately 80 Lakhs now my questions are :-

1. In which head The income from Day Trading will come (Capital Gain, Business income or Speculative Business income).

2.Is he liable to Tax Audit U/s 44AB.

3.What is the amount that we have to write in the AIR column of ITR (i.e amount of purchases or Sales).

4.Do we have to use ITR 4 in this case.  

 

Replies (6)

1. Speculative Business Income.

2. He will be liable to tax audit if profit or loss during the year crosses Rs. 40 lakhs.

3. No requirement to mention amount of purchase and sale of shares bought on recognised stock exchange

4. Yes ITR - 4 

FOR PARA 2 THE TOTAL OF PROFITS AS WELL AS LOSSES (GROSS) WILL BE CONSIDERED FOR CALCULATING THE TURNOVER OF 40 LACS FOR TAX AUDIT. E.G. 50000/- PROFIT AND 20000/- LOSS WILL BE CONSIDERED AS TURNOVER OF RS.70000/- FOR 44AB PURPOSE. 

hi manish, it will be treated as business or profession and will be filed with ITR 4. 44AB will be applicable only  if profit or loss exceed 40 lakh. guidence will be available for special points on business or profession in ready reckoner . and will agree with maheswari.

YES....

i agreed with above reply...

i support to the reply

 

manishji ,

in case of day trading the turnover is decided on the net off profit & loss suffered during the year . suppose der is a profit of 100000 and a losss of 50000 den the turnover wd b only Rs.50000 . and itr - 4 will b used 4 it.

 

 

 

 

 

1. Business Income ( Speculative ) 43(5)

2. yes T/o would be total of favorable and unfavorable difference ( that is profit + loss ) as per guidance note on TA issued by ICAI,i guess adityaji has bymistake mentioned as profit or loss

3. Not required , unless 003 /002 is applicable for IPO's etc

4. ITR 4 since it will be assessed as business income

 Dharmesh , in your example , the turnover for 44Ab will be 150000 ( 100000 + 50000) and not 50000 , should be noted that yr information is not correct .

 

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