Stock market trader

Dear Sir,

Please find below answer to your quarries :

- If it is not turnover of F & O than audit applicable when turnover crosses Rs. 2 Crore for current year

- If it is by will show it as gift from inheritance otherwise show it as gift from her mother in law in return as exempt income

- File return u/s 44AD and declare profit of 8%

Sir what source of income does your mother have? And of which year does this turnover reflect ?

Hi Rajesh,

for stock market-

DETERMINATION OF TURNOVER IN RESPECT OF NON SPECULATIVE TRANSACTION

Determination of turnover in case of F&O is one of the important factors for every individual for the income tax purpose. Turnover must be firstly calculated, in the manner explained below:

1. The total of positive and negative or favorable and unfavorable differences shall be taken as turnover.

2. Premium received on sale of options is to be included in turnover.

3. In respect of any reverse trades entered, the difference thereon shall also form part of the turnover.

Here, it makes no difference, whether the difference is positive or negative. All the differences, whether positive or negative are aggregated and the turnover is calculated.

DETERMINATION OF TURNOVER IN RESPECT OF DELIVERY BASED TRANSACTION:

Where the transaction for the purchase or sale of any commodity including stocks and shares is delivery based whether intended or by default, the total value of the sales is to be considered as turnover

So if after calculating turnover as mentioned above , if your turnover is above 1 cr tax audit is required.

2) your mother is required to show the value of gold received as exempt income received from relatives while filing the return.

3) This business income you can show as presumptive income under section 44AD showing net income as 8%

A small business entity have an option to pay tax on estimated income.The income tax department give relief to small business to pay tax on presumptive basis under various section of income tax act.

Profit and Gains U/s 44AD

Eligible Assessee:- only Individuals, HUF and partnership firm who is resident in India are covered under this section but company, AOP, BOI are not adopted this scheme.

Eligible Business:- Eligible business means any kind of business except plying, hiring or leasing goods whose total turnover or gross receipts does not exceed an amount of Rs 1 crore.

Deemed Income/profit:- The deemed income/profit under this section shall be an amount equal to or higher than 8% of the total turnover or gross receipt.Assessee who adopt this scheme can not show taxable income lower than 8% but higher or equal to 8% taxable income of his gross income can be taken.

The presumptive taxation scheme of section 44AD can be opted by the eligible persons, if the total turnover or gross receipts from the business do not exceed Rs. 2,cr.

points to note:

1) you can file both businesses under presumptive incomes -But first you need to check if turnover of both the businesses together exceeding two crores then you have to go for tax audit.

2) or file both under normal business income and if together turnover is crossing 1 crore you have to go for tax audit.

for any doubts or clarification you can reach me at agarwalvishakha23@gmail.com

Dear Sir,

The value of gold as on the date of receipt can be shown in the exempt income section as a gift. further please let us know this turnover of your shop relates to which year?

Please feel free to call in case you need to understand the same in detail.

Thanks and Regards,

Abhishek Dugar

CA, CS, B.Com

Hello Sir,

Yes, you are liable for tax audit since your turnover exceeds the threshold limit.

2. Does your mother file her balance sheet while filing her returns.

3. You can claim deductions u/s 80 in order to save up on taxes.

If you are a day trader in the stock market, it is likely that your income may be considered as speculative income.

If you are trading on behalf of your clients, if any, then your turnover will have to be computed on the basis of commission received by you.

The purchases and sales of the shares are most likely to be reflected in your 26AS, the data base maintained by the Income Tax Department. In such case, you may have pending compliance issues, when you log in to the efiling portal of the Income Tax Dept.

If the cloth business turnover is also in the same name as that of stock trading business, then the aggregate turnover is most likely to exceed Rs 2 Cr.

As regards the gold there will not be any need to file return to declare the gold, acquired through inheritance, unless you sell them.