Tax calculation

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 I am an software professional and i trade intraday as well.My taxable income rate is at 10%.Suppose if i borrow  4-5lacs and trade.Within 1 year,i return  the borrowed amount 4-5lacs. Would the borrowed amount be considered as taxable income and if so,what would be the tax rate? Now what would be my tax calculations? 

Replies (7)

you borrow an amount for intraday. Borrowed amount is not any income ur generating. it is considered as a loan. No tax is payable on loan or borrowed amount. It is your liability that u will pay it within 1 year.

See, You alway need to note one thing that is , Tax is only on profit you made for intraday. Borrowing and repaying is a separate transaction which does not attract tax at all, but if any intrest is paid this can be deducted as expence if you are showing income from trading as business income.

Eg : Bougt at 100

        Sold at    120

         Net            20 is taxable and if any interest is paid on loan borrowed for this investment then it can be deducted from this 20 (if int is 5 only 15 is taxable @ tax rate applicable)   

ya i agree with both of them as there is no tax liability on borrowing the money as it is not your income it is just ur sourse of fund .

ya there is no tax liability on borrowing as it is a loan

yup! no tax lability

Mr. sunil gave a nice explanation but be sure that u have clear evidences of the loan if you are showing loan and demanding deduction.

 I am borrowing money from my friends so what can kind of documents can i show as evidence for borrowing? Will a writing on a stamp paper document good enough as a evidence for borrowing? What would be the tax implications if i dont show any evidence of my borrowings?

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