Comment on Classifying Your Market Activity

Manish Mehta commented on 24 Nov 2017, 03:05 PM

I have a full fledged business and filing returns under section 44AD since my turnover is less than 2 crores. I also have long term investments in equities in my personal name. I am planning to start trading in F&O in my personal name.

Will trading in F&O affect my long term holdings in the sense that will my long term holdings come under the scanner and might be at risk of being declassified as long term holdings ? My assumption is that even if I am trading in F&O (or for that matter in intraday), my long term holdings will always remain as long term holdings. I plan to declare any income from F&O or intraday as business income.

If there is any possibility that my long term holdings will come under the scanner after I start F&O or intraday, then I am thinking of doing F&O and intraday trading under a new HUF entity of which I will be karta.

But from what I have read here, as long as you properly classify your F&O and intraday income as business income, you can be a trader and investor as the SAME time. So there is no risk to your long term holdings being reclassified also as business income.

Please confirm.


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