Government employee future options trading

Generally Government employees are not allowed to do any other business and if they want to do they need to take permission of their department but I dont think there will be a problem in doing future and option trading, but to be on a safe side it would be better if you transact in your wifes account.

If you show income under presumptive taxation scheme you can use ITR 4.

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Thank you.

ITR-4. Definition of turnover will change.

Yes he can. ITR3 to be used 

Usually F&O trading is reported as a business non Speculative thus maintaining of books of accounts and Audit (if applicable) is required and ITR form 3 to be file.

Dear Sir,

Hope you are doing well !!

As per my understanding, a government employee is barred from doing business. 

It is advisable to do the same with your wife's PAN/account.

As per the income tax department, any purchase of shares made with the motive of earning profit is considered to be Business income, whereas investments made with the intent of earning income through dividends will amount to capital gain.

Trading in futures & options must be reported as a business unless you have only a few trades (say if only 2-3 trades) in the financial year. For that, you need to file ITR 4 if you are taking presumptive taxation scheme.

For instance, if a salaried individual just has a handful of such trades, income out of it will be taxable as capital gains only i.e. you need to file ITR3. However, for a regular trader, the income is chargeable to tax as a business income. 

Hello,

A government employee is allowed to invest in shares, derivatives, mutual funds etc. but not in a speculative manner. so I think you will be allowed for F&O Trading.

If you want to use presumptive taxation, you can file ITR-4. You also need to check the applicability of the tax audit. If it is applicable, you will be required to file ITR-3.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Please note that from an income tax perspective trading in f&o is non speculative. You should check the definition of speculative activity in a legislature which restrict government employees to do speculative activity.

ITR 4 should be used for presumptive taxation. However, for f&o trading its not advisable to use presumptive taxation.