Comment on Taxation Simplified

Nithin Kamath commented on 08 Mar 2014, 08:53 AM

1. Yes you need to show yourself as a trader(business), hence use the ITR 4 form, but you can show your short term capital gains and your future profits (business profits) as separately. What i’d advise is if your short term trading is very active, then show the short term gain under business profits as well. But if your short term equity trading, is just a few, show it in a separate head.

2. ITR4, 44AD is for if you require an audit or not, if the turnover is less than 1 crore and profit more than 8% of turnover you don’t need an audit. If your turnover is over 1 crore, you need an audit. If your profit is less than 8% of turnover, and your turnover is less than 1 crore, you need an audit, and my advise is only in the last case if your profit is less than 8%, you can show a higher profit of 8% to avoid audit fees.

3. F&O trading is considered as a business income, so if you are trading F&O you have to file as a trader using ITR4 as per regulation. There are also benefits in the sense that, you can claim on all expenses you have incurred while trading, and also you can carry forward the losses for 8 years if any.

Hope this clarifies,


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