Comment on Taxation for Traders - Introduction

Nithin Kamath commented on 06 Apr 2015, 12:16 PM

Hey Thanks Sriram,

As an NRI, you are not allowed to trade intraday. Unless you update the details with us, and setup your NRI account (details here), for us you will continue to be a local resident account.

Since you have done some intraday trading you will need to use ITR4 to show this. If it was only short term equity, you could have just used ITR2.

1. You can show your short term under capital gains. So only your intraday equity trading will be considered as a business. Even if you are making less than 8% of your intraday trading as profit, it would make sense to show 8% (since your turnover is less) to avoid an audit. 8% of 1.7lks is around 10k, so even if you are in the 30% bracket, you pay only 3k as taxes much lesser than the tax audit charges.

2. Yes NRI or local resident, short term capital gain is 15% flat and Long term is zero. If you declare your short term trading as a business, then you would have to add it to your other income and pay according to the slabs.

3. You could have used ITR2 if there was no intraday equity trade. So if you want to be 100% compliant, yes you need ITR4. But not everyone is, (hinting u) 🙂

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