Whether the income obtained as facilitator is taxable

Ravi (Manager) (23 Points)

28 December 2020  

Dear All,

I have a query. For instance, I have pooled up some money from the savings of my friends and relatives who pay the taxes duly, and I have outsourced it as an investment  for 10% returns to a trader/PMS to generate income through trading. And the trader/PMS paid the STT, GST and the short/long term capital gain taxes on the trading income and then he pays me back the invested amount plus 10% returns.  Finally I pay the original principal amount that I took from the friends and relatives back to them after an year, do I need to pay the tax on the profit (10% returns) I obtained on this transaction being a facilitator, as I see the taxes were duly paid on both ends of the transaction. i.e. Income tax will be paid from my friends and Tax on trading income is paid by the trader.