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Need advise regarding advance tax calculation

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stranger333

Friends, my income source is primarily from stock market trading with majority being short term trading and some intraday trading. I have around 12L of short term capital gain and 60k of intraday trading gain. My brokerage account is with Zerodha and IDBI capital and I use both of them for trading. I also have some mutual fund investments and fixed deposit income. Up until last year I was working and only had salary income so I used to file tax on Income tax website online tool and it was simple. But given this time around my income sources have changed and I don't have any salary income I am wondering how to go about filing. Do I need to hire a CA or can I do it using some simple software? Also can I take any deductions like 80C, 80D, etc. to reduce tax liability on my income from trading or from FD/Dividends?

Tagging dimers who I know have universal knowledge @bikidas2060 @tappukepapa @Vrushali.S  @ simbha @Simbha3 @ Origna @Original @Demondealer @Demon_slayer

Please help me tag dimers who operate in stock market and can help me out here.


TIA.




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Deal Lieutenant Deal Lieutenant
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@third.i.financial.advisors

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Pay your advance taxes by 15th march . Dont delay that ... you can pm me for filing ITR.


Apart from this above posts are right about type of itr to be filed.



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Benevolent Benevolent
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  • Hire a CA and avoid any hustle. (you can get a reputed professional CA to file your return in ~2k) 
  • or you can even file your return yourself with the help of YouTube. Everything you need is present there.

Qq - How do you earn 12L from short-term capital gain?

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Pls dont do with youtube ... there are many small minute things which people might miss ....  for only salary cases its fine but not for others 
Review Expert Review Expert
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hey there @Stranger, from whatever little knowledge i have about tax filing, i think your short-term capital gains & intraday trading gains will be considered as speculative business income and would be taxed as the same (instead of just "short-term capital gains")..you might need to file for ITR 3 form (as per my knowledge). You can still claim 80C and 80D deductions but not specifically against your trading income. I would say it's best to consult a CA. There are online tools like ClearTax also which have plans for ITR filing, so you can check that out too. Hope this helps. 

Deal Subedar Deal Subedar
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I'm flattered to be mentioned as one of the people you think who possess universal knowledge smile, Thank you blush.

____

I myself have doubts on how a person who trades in the stock market needs to file for IT. But I have researched on the subject a while ago, so here is what I know.

1. First of all, you need to file ITR-3 as business income Or ITR-4 depending on how you want to file(see no. 8).


2. Your trading income should be treated as business income and you can deduct the expenses incurred from the gains(stt, stamp duty, gst, brokerage etc.,) and the losses as well no matter short term or intraday.

3. Your fd income is to be considered from  "other sources". Fully taxable every year. If you have a 2 year cumulative fd, you will have to calculate interest for the year passed and pay taxes on it.


4. You can deduct all deductions available to an individual if you file using old regime, 80c, 80d, etc.,


5. When you are filing for business income the gains are considered secondary for tax treatment. Your turnover is very important.

6. Your turnover determines somethings, like for example, audit.
if your turn over is less than 2 crores, you don't have to go through audit(things like this). So calculate the turnover and look up "audit requirement for turnover" to get the details.

7.  For purpose of turnover, your intraday turnover is just your profit or loss.

For anything you take delivery, your turnover is the whole buy and sale value.

8. You also have the option to choose presumptive taxation but since this is trading, you are bound to have higher turnover, a flat 6% could be a lot.


These are some of my doubts,


8. Apparently IT dept doesn't like it when someone files stock dealings as both trading and investment.

Also If you file it as business income one year, you have to keep filing stock investments as business income every year for the foreseeable future. You are not allowed to choose them as investments next year.

Can someone shed light on this?

9. Brokerages give p&l statement for a year. Does a trader need to prepare books and accounts kind of thing?
Or is the statement from the broker enough.

@malikcool @bikidas2060 @Rajkotian
Are trading savants as far as I know.





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Also If you file it as business income one year, you have to keep filing stock investments as business income every year for the foreseeable future. You are not allowed to choose them as investments next year.


No. If you don't trade in FNO anymore then you don't need to file ITR3 anymore. 😊😊 https://tradingqna.com/t/how-to-shift-from-itr-....




Brokerages give p&l statement for a year. Does a trader need to prepare books and accounts kind of thing?

Or is the statement from the broker enough.



The statement from the broker is enough if it is easy to understand. Otherwise it is wiser to prepare books and accounts. FNO Turnover over 1 crore requires tax audit and if 95% of the trnxs are channeled via banking route then 10 crore ceiling will be applicable for the same. https://www.taxmann.com/post/blog/tax-audit-how....,  https://qna.tax/t/is-tax-audit-applicable-for-i...

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Deal Newbie Deal Newbie
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Similar question which ITR file for Salary + Short Term/Long Term CG + IPO Profit?

Deal Subedar Deal Subedar
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Very simple in your case, file itr 2 with the cg details.
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Pay your advance taxes by 15th march . Dont delay that ... you can pm me for filing ITR.

Apart from this above posts are right about type of itr to be filed.

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First of all congratulations for the gains @stranger333

Second you should FIle ITR3 as @bikidas2060 bhai mentioned

intraday trading income will be treated as business income and so ITR 3.

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meet a proper CA offline 

now IT depart is very active with AI... don't need any mess.

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