Start day trading as business

Tax queries 230 views 3 replies

Sree Ram

Managing Director

28 Points Joined May 2015

I do day trading with my own personal funds and I am interested in setting it up as a business. I am planning to hire a person to help me and have other expenses such as internet, computer equipment, brokerage, salaries, rent etc.

My questions are as follows

1.Can I register day trading as a sole proprietorship business?

2. Should a demat or trading account be opened in the sole proprietorship name or can it be in the name of individual itself? (When I asked my broker, he said I can open trading account only in an individual account name or in the name of company and the bank account has to be in that name. So if I create a sole proprietorship, and if my demat accountdaccount is in the name of individual, can I claim brokerage paid as business expenses to sole proprietorship.)

3.What should I mention as the nature of business when asked for formation of business?

4. Do I need to get any licenses for setting up day trading as a business? I have rented a place to do my day trading operations. (I am from Tamil Nadu)

Thank you

Sreeram

Replies (3)

CA. Umesh kumar

ca.umesh11@gmail.com

1465 Points Joined October 2007

Sole proprietorship business and individual has no separate indentity, You can do this business in your own name, you can claim all exp that you mentioned, Nature of business- investment activities(13010) or others, Do in your name to get tax slab benefits and other deduction

Sree Ram

Managing Director

28 Points Joined May 2015

Thank you for your reply sir.

So should I start a current account in my name or my business name in order to pay all the business expenses? Or it wouldn't matter on what name it is if I am starting as a sole proprietorship?