Speculation & Business Income u/s 44AD
This query is : Resolved
07 June 2024
I have speculation income from (intraday share trade )of 5 Lac and T/o 568000 and business loss (F&O) of 7500 and T/o of 11658. How I show profits in ITR 3?
Under P&L a/c in 65 & 66 column of ITR 3 it says
1 Presumptive income which has only business income and no speculation colourblind
2. No account case where both business and speculation can be shown.
Have STT of 185000 and GST/CST of 25000 not allowable for deduction under short term gains.
Cases:
1. If whole speculation income shown then tax liability will be high and if apply 6% formulae or show higher say @25% then can reduce. But if income from business and speculation crosses 250000 message shows that balance sheet need to be submitted along with filing.
Advice what income ideally to be shown and how in ITR to avoid future tax disputes and clarify.
Thanks
Under P&L a/c in 65 & 66 column of ITR 3 it says
1 Presumptive income which has only business income and no speculation colourblind
2. No account case where both business and speculation can be shown.
Have STT of 185000 and GST/CST of 25000 not allowable for deduction under short term gains.
Cases:
1. If whole speculation income shown then tax liability will be high and if apply 6% formulae or show higher say @25% then can reduce. But if income from business and speculation crosses 250000 message shows that balance sheet need to be submitted along with filing.
Advice what income ideally to be shown and how in ITR to avoid future tax disputes and clarify.
Thanks
07 June 2024
Show full speculation income. Opt for new scheme no tax payable in case of no other income.
In the balance sheet under assets side show bank balance and liability side capital account show assets side total.
In the balance sheet under assets side show bank balance and liability side capital account show assets side total.
07 June 2024
Can 44AD be not applied? Have other income of 5. Lacs also.
07 June 2024
44AD not applicable for speculative income.
Pay applicable taxes by opting new scheme only less tax payable.
Avoid receiving notice from income tax.
Pay applicable taxes by opting new scheme only less tax payable.
Avoid receiving notice from income tax.
07 June 2024
Thanks for clarification.On same forum I was guided to go for presumptive income u/s 44AD.
07 June 2024
You are welcome...
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07 June 2024
Income tax Act says:
Turnover considered for the purpose of Sec.44AD-
Since, a number of transactions in speculative business are involving intra-day transactions, futures and options etc, turnover is based upon the following two situations-
If delivery of Goods is made-
Turnover = Value of Scrips sold
If delivery of Goods isn’t made-
In this case profit/loss is booked through increased/decreased value of scrips in future conditions as compared to present ones.
Turnover = Amount of Profit/Loss
The view expressed by other CAs are that 44AD applies even to speculation income and 6% of turnover be taken minimum as profit,
Advice
Turnover considered for the purpose of Sec.44AD-
Since, a number of transactions in speculative business are involving intra-day transactions, futures and options etc, turnover is based upon the following two situations-
If delivery of Goods is made-
Turnover = Value of Scrips sold
If delivery of Goods isn’t made-
In this case profit/loss is booked through increased/decreased value of scrips in future conditions as compared to present ones.
Turnover = Amount of Profit/Loss
The view expressed by other CAs are that 44AD applies even to speculation income and 6% of turnover be taken minimum as profit,
Advice
07 June 2024
Futures and options trading for which turnover is sum of profit and loss is not speculative trading for which 44AD applicable.
Speculative trading is intraday trading of shares for which 44AD not applicable.
Speculative trading is intraday trading of shares for which 44AD not applicable.
07 June 2024
Then should it be shown under profit loss from business or income from other sources?
07 June 2024
It's to be shown under profit and loss from business.
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