Tax Liability on Joint Trading Accounts

Tax queries 5438 views 7 replies

Rizzo

Employed

24 Points Joined April 2010

Hi All,

Can someone let me know, how to treat the Income Tax liability on the Income from Trading in Listed Shares, Futures & Options. My 2 friends are having a Joint Trading & Demat Account with a broker, in which they trade in the stock markets.

But in the contract notes only First Holder Name would appear, in that case its only First Holder liable to pay tax or both?

Thanks

Replies (7)

Aditya Maheshwari

CA in Practice

35867 Points Joined June 2009

Yes the person in whose name contract note is generated and whose PAN is shown in the contract note should show the income. Also this is a very strange case where persons are having joint trading account as people have joint bank account, joint demat account, etc but not joint trading account

sudhir rawal

B.COM/PCC/ARTICLE/'O'LEVEL

319 Points Joined February 2009

in your case one demat cannot be having two holder at one time thier must be one nominee in your this query

and

when the all the income is in the name of first holder then the first holder will liable to pay tax

Aditya Khaitan

Manager Accounts & Tax

40 Points Joined January 2009

Originally posted by : sudhir rawal
	in your case one demat cannot be having two holder at one time thier must be one nominee in your this query and when the all the income is in the name of first holder then the first holder will liable to pay tax

I agree with Mr. Sudhir.....

prm..

Individual

95 Points Joined July 2010

I have read somewhere that income from joint trading is treated as income of BOI, body of individuals, don't know whether I am right or wrong. But then if I want to do trading in joint with some one whats the process??

how can I do trading by forming a BOI ?( body of individuals

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

joint accounts means nothing but normal accounts, 1st holder is sole, and balance are-co owners,

all profits and gains / taxes are routed to 1st holder only.

for BOI/AOP/Partnership accounts, one have to apply fresh pan in pattern of execution, and open account accordingly.

prm..

Individual

95 Points Joined July 2010

"For BOI/AOP/Partnership accounts, one have to apply fresh pan in pattern of execution, and open account accordingly"

Please tell me the process to apply PAN and once I receive PAN , how to tell broker that we want to open account in name of AOP. Further demat will be opened in name of AOP or individual ??

I spoke to brokers but they are not having enough knowledge for the same and even their account opening forms dont have such facility.