Zerodha Email- Taxation

January 29, 2013
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Zerodha Bulletin

Dear Fellow Traders,

It is that time of the year when all of us have to sit and plan for our income tax returns. I am sure many of you have an umpteen number of queries when it comes to taxation while trading equity, F&O, Commodities and Currencies.
It is important to declare either profits or losses while trading the markets. Did you know that you can carry forward your trading losses and set them off against trading profits any time in 8 years from when you have filed your returns?
The first article in this section is on Taxation; inputs taken from Om Prakash Jain, a chartered accountant who also runs www.taxiq.in. We have put down an article together which should answer most of your basic queries.Click here to read the article.
You can post your questions regarding taxation using the comment window at the end of the article and we will answer them at the earliest. Do forward the articles on Zconnect to your friends & family. Let us put an effort together to create a much smarter trading community.
Happy Learning,
Zerodha

Your friendly neighborhood discount brokerage

25 comments

  1. Sathish says:

    I would like to thank and congratulate on this initiative…very helpful article.

  2. Manu says:

    Hi Nithin,

    Beyond tax the most wanted matter is about book keeping.
    Through some guides with examples for us to keep Books properly.

    Thanks.

  3. ASKReddy says:

    Hello Nithin,
    Thank you for detailed explanations. I didn’t file my last yr loss. I will file this year loss for getting that benefit from loss.

  4. Javed says:

    Hi, Nitin,
    Thanks for the initiative on taxation. I just want a clarification on profit/loss, suppose in Intra Day trading of commodities futures If I make 10 trades in a day, out of that 6 trades are profitable and rest of the trades are of loss Net profit of Rs 2000 after adjusting loss of Rs 1000 on the same day, my profit for the day for taxation purpose will be considered as Rs 2000 or Rs 1000 (i.e. 2000 – 1000).

    • Nithin Kamath says:

      Javed all your net taxation dues are considered yearly(April 1st to March 31st). Basically your tax dues would be on the net profit you make during the entire year. The due dates to file are mentioned on the article.

  5. Alok74 says:

    Hi,

    Iam salaried person, and had taken loan from bank of 1 lakh which was invested , however i withdrew for personal reasons the remaining funds once 50000 and another 30000, 2 thousand odd rupees still remains in the trading account. I made a loss , When opening i put 10000 from my savings , however even that turned out to be loss. What form should i submit for IT returns?

    I was out of Job from 2009 to 2010 April 30th and May 2011 to 2012 April 30th, but in 2012 May ,i got a job again.

    Request suggestion.

    • Nithin Kamath says:

      Alok,

      If I got your question right, you had together put Rs 1.1lk in to your trading account and you withdrew 80k . So you had a net loss of Rs 30000.

      What is important is when was this loss made, if it is between April 2012 to mar 2013, then you can file this loss along with the return that you will file for this year and you will get the benefit that you can set this 30k loss against other income of yours(other than salary). Even if you don’t have such an income, you can carry forward this loss and net it off against such gains you make during the course of the next 8 years. I am assuming here that your trading in markets was active trading( F&o and short term), if you are trading was intraday equity, you can net off this loss only against any intraday gain you make in the next 4 years..

      If you have been trading actively this year use the ITR4 and if you are not actively trading this year use ITR1 or ITR 2(ITR2 if you have rental income also)..

      Hope this helps..

  6. AmitDhakre says:

    Hi,
    I have one doubt. This year my friend purchased shares and took delivery using my demat account. He made profit of 5000 in that as short term capital gain. In this scenario, what is the procedure that can be followed as i would like to add this profit in my statements.
    Thanks

    • Nithin Kamath says:

      Amit, since the trade is done on your account, it will automatically be considered as your profits, which you can set off against your other trading losses as mentioned in your other question. There is no procedure required.. Cheers..

  7. Vimal says:

    Zerodha,

    Is there any way to get the sum of all STT paid for the last financial year? Or at least a certified FORM NO. 10DB?

    I am new to Zerodha and I am not sure whether this option exists or not.

    Thanks in advance.

    • Vimal says:

      Just a reminder to get quick answer. is it not possible???

    • Nithin Kamath says:

      Sorry had missed this,

      When you login to the backoffice, you will see links NSE, NSE f&O etc on the left. Under each of the menu, you will see a sub menu , view day bill.

      This will show the STT, also if you are checking for last financial year, make sure you make the change in the financial year on the right top of the page.

    • Vimal says:

      Thank you Zerodha.

      Have done everything as per your instruction. But I am getting a 100+ daily bills in a single PDF report. I have to manually sum up all this STT to obtain a total STT.

      Isn’t there any way to get a summary of STT paid?

    • Vimal says:

      I got it. I just looked at the Profit/Loss section of FNO and received the report to meet my requirement. Thanks anyway.

  8. Tharun says:

    Hi,
    I’m a intraday/positional trader of futures and options.
    in the time of income tax filling, i should show only the profits.
    Did my profits come under short term capital gains(covered under section 111A)
    if then how much % tax should i pay?
    Thank You.

  9. RS0981 says:

    Hi Nitin,
    First of all thanks a ton and congratulations for this great initiative. No one cares for the clients so much. My query is as under:
    If I make a long term loss on sale of tax free bonds can I set it off against long term gain on housing property?

    • Thanks,

      Long term capital Loss rising on account of sale of shares, mutual fund where STT is Paid is not allowed to setoff against other Income.

      In the question its tax free Bonds … On tax free bonds there is no STT and henec you can take benefit of indexation and loss should be available to setoff against Long Term capital Gain from other asset like property.

  10. hari singh says:

    can a govt servent can do future trading in his indiviual name or in huf account in which he is a KARTA as per sevice conduct rules.

    • There is no restriction against it, but it again depends on which department you work for and if you have access to information that can effect market movement. It is best to confirm once where you work.

  11. Nitin Shinde says:

    Hi Nithin,

    I started trading from may-2014 only on F & O and my turnover is 75lac for 2014-2015. As per rule audit is needed (profit 16K – brokrage 34k)
    but here in Pune CAs are asking very big amount for audit. I do not want to pay 25K to CA just for watching my excel downloaded from zerodha back-office.
    Does zerodha provide any services for such cases. I have salary income + F & O.

    Thanks,
    Nitin Shinde

  12. Nitin Shinde says:

    Thanks Nithin for the reply. Hope next year I’ll just opt your services by just a single click on zerodha itself 🙂

  13. PRANAB SARKAR says:

    Mr. zerodha, my question is which figure i should show as far as Income tax is concerned out of this two–(FY-2017-18)
    i) Total F&O gross profit=85,590
    ii) Total charges=39,309

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