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E margin trading

krishnan shankarmani (5 Points)

12 January 2021

What is the turnover to be considered for Income tax purposes, if shares are traded using e margin scheme.

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8 Replies

Kapadia Pravin (17264 Points)
Replied 13 January 2021

E-Margin is a leverage trading facility where you can buy in delivery by paying only 25% funds. Unlike other leverage products, E-Margin lets you carry your position for next 90 trading days.

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krishnan shankarmani (5 Points)
Replied 13 January 2021

Shares are not delivered to demat ac.

Consideration is not paid in full. Shares are not delivered. Hence the question, "what is the turnover for IT purposes

Krishna Chaudhary (Accountant) (4531 Points)
Replied 15 January 2021

Sum of all difference between sale and purchase after eliminating all minus sign

Vaishali bobbili (Job) (2 Points)
Replied 11 March 2024

sir I'm doing margin trade in HDFC securities where I pay 30% of purchase value of shares and rest is paid by broker for which iam charged every day interest untill I sell the shares. So suppose I buy 100000 worth of shares I pay 30000 and rest 70000 paid by broker. I keep them for 3 months and sell at 140000. so my profit is 40000 but in 3 months I have paid say 10000 as interest. how do I calculate my turnover for tax purposes. please help me.

Nikhil Kaushik (Fellow CA) (86549 Points)
Replied 11 March 2024

if you are taking delivery, then the sell and buy value is the actual values of sell and buy side.

however, if the delivery is not being taken, then the turnover is calculated as sum of absolute values of sell - buy.

In your case, 40000 is the turnover. 10K is the interest expense.

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SR BP (4 Points)
Replied 14 March 2024

Sir , it is delivery based but pledged as I only pay 30% of total value. If I treat it as business income as per my example above what is my turnover? 140000 or 40000.please let me know

Nikhil Kaushik (Fellow CA) (86549 Points)
Replied 14 March 2024

in that case, the sell side is the turnover ie 140000/-

The cost is 100000/-

Interest paid is to be added to expenses.

SR BP (4 Points)
Replied 14 March 2024

Sir as it is margin trade ,though I sell for 140000, I recieve only 30000(30% of purchase)+40000 which is 70000 into my account and rest 70000(70%of purchase) goes to bank or broker .in this case how can I do my turnover calculation. Please let me know