ITR & online trading.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 July 2010 If I am trading in my dads and moms account , although the capital belongs to them, then the profit realised in my dad and moms account will be their own income or the ITO may raise objection and club their income with my mine, since my dad and mom were not trading , it was me trading in their account .

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 July 2010 The profit realised in my dad and moms account will be their own income.

Give them some insight about trading in shares and some knowledge in shares. Then the ITO will not doubt the transactions.

CA. Pradeep Nayak

CA. Pradeep Nayak (Expert)
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27 July 2010 Trading account belong to your parents and also capital. Any profit/loss made thereon will be of the account holder. ITO cannot raise objection & club it with your income. Moreover, how will the ITO know who was actually trading?

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CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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27 July 2010 ITO HAS NO RIGHT TO RAISE OBJECTION THAT YOU ARE USING ACCOUNT OF FATHER & MOTHER TARADING A/C.
FATHER & MOTHER ARE SEPARTE ASSESSEE, YOU HAVE TO FILL THIER RETURN SEPARTELY.

FOR EXAMPLE, THERE ARE SO MANY SHARE BROKERS, THEY ARE TRADING IN CUSTOMERS A/C ON BEHALF OF US WITH THEIR CONSENT ON GOOD FAITH.

ITO CAN'T CLUB IT WITH YOUR INCOME

Querist : Anonymous

Querist : Anonymous (Querist)

27 July 2010 Thank you so much for your kind support.

Mr XYZ is not having any business , he trades actively in FNO and earn his livelihood. He makes 3lacs per month.

He invest his profit in equity for long term so that he can take benefit of long term tax expemtion.

He has made two book of accounts: 1 where he trades FNO . The other is his personal book of account where he has shown investments.Point to be noted, he trades in how own name, ie there is no sole trading co.

The investment are held for minimum 370 days ,after that Mr XYZ sells them and claim tax free income.

Now , considering the heavy volumes and money Mr XYZ makes in FNO , considering that he is having good knowledge of FNO and market ,can the ITO raise objection saying that this invetment is stock in trade and only mere maintaining two seprate book of accounts doesnt qualify them as investment?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 July 2010 First of all if the assessee is making profit of 3 lacs p. m. in F & O then it itself is business income. So business income is there.

Now u have share trading business also. However in the same shares are held for a considerable period fo time so there should not be any problem in rpoving that the same is LTCG and shares are held as investments and gain on the same is capital gains.

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