Comment on Taxation for Traders - Introduction

Hi Nitin,

I follow you regularly, thanks for those efforts which you make to keep us updated and making every investor informed.

Here is the situation:

A trader who only trades in NIFTY Options and invest in about 4 Lacs every day and sells them every day no carry over to next day. Assuming He makes a profit of 50K every day and trading for 250 days in a year he will make a GROSS profit of 1.25 Crore profit (The profit includes bokerage, and other trading expenses i.e internet , phone bills etc.) The trader is also a regular service personnel working for a Pvt. Ltd. Company. I wanted to know the following:

1. Whether The trader need to get his books audited, or the trader can simply show this a short term Capital gain and can add this income to his salary income and pays the income tax and not consider this as business.

2. Does this trader needs to register under proprietorship firm is it mandatory or the trader can still be working with his company and can trade and its ok to do that with this kind of profits.

3. How do you calculate the turnover here.

Regards
Deb

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