Comment on Taxation Simplified

Poonam commented on 23 Jul 2013, 06:51 PM

Q1) The above article says:
“As long as the trading in derivatives is carried out on a recognized exchange, it is not considered as a speculative transaction like in intraday stock trading. A person trading derivatives is automatically considered as a person who is an active trader or trading as a business. In such a case any profit or loss from derivative trading is considered as “Profits and Losses of business or profession.”
Any profit would be a business profit and you would have to pay taxes after adding it to your other income and according to the slabs mentioned on the table above.”

if other business activities generated an income of 3 lakhs and NSE futures trading resulted in a loss of 2 lakhs, can this futures loss not be carried forward since it should be calculated with the other business income ?

Q2) The article also states..
“Section 44AD until AY 2011-2012 was meant only for businesses in civil construction. From AY 2011-2012, this was made to include all businesses including the business of trading. What this section states is that even if your turnover is less than 1 crore, if your profit is less than 8% (if you made a loss also), you will still need to have your books audited by a CA.”
In the above case, only futures trading with a loss of 2 lakhs would have required an audit by CA.
But since the income from other business is 3 lakhs (a net profit of 1 lakhs), will it still need audit by CA (the net profit is greater than 8% of turnover).

Nithin, Thanks for this initiative to simplify taxation issues. It is a very helpful blog.


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