Comment on Classifying Your Market Activity

l_earn_err commented on 29 May 2018, 06:45 PM

The above case is of F&O (non speculative business) and you’ve mentioned in para 3.1 about this business income as follows:

“business income has no fixed tax rate, you are required to add the non- speculative business income to all your other income, and pay taxes according to the slab applicable to you”

As per the case stated by Mr. Jha, Suppose…..

His Turnover = 90,00,000 (<1 Cr)
His Profit = 8,00,000 [over 7,20,000 (8% of turnover)]
His income = 2,00,000 (<2.5 Lakhs)

Now the profit from F&O business should be added to his other income. So his taxable income becomes 8,00,000+2,00,000 = 10,00,000.

So, his tax slabs should be as follows:
0 — 2,50,000 = 0
2,50,000 — 5,00,000 = 12,500 (considering present 5% tax rate)
5,00,000 — 10,00,000 = 1,00,000
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So his total tax liability should be Rs. 0 + 12,500 + 1,00,000 = 1,12,500, NOT Zero as replied by you.

Please clarify where did I go wrong while calculating the tax liability in the above case??

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