Value Options Itr: Fill & Download for Free

Hi,Intraday and F&O is treated as business income for income tax purpose. Therefore you are required to file ITR-3.You can use Know your ITR form toolOne can invest in equity shares, equity mutual funds, futures, options, commodities, etc. The type of trading needs to be categorized since the turnover calculation and taxability varies.Capital Gains- When there is a delivery based trading, there are lesser number of transactions and the intention is to invest and hold the shares, income must be classified as capital gains.File ITR using expert assistance for Capital Gains IncomeBusiness Income- When there is a non-delivery based trading (equity intraday trading), it is considered as a speculative business income. In the case of delivery based trading, if there are a larger number of transactions or the intention is to trade, it is considered a non-speculative business income.File ITR using expert assistance for Business IncomeDue DateTaxpayers to whom tax audit is applicable - 30th September 2019Taxpayers to whom tax audit is not applicable - 31st August 2019 (extended from 31st July 2019)Calculation of TurnoverGenerally, absolute profit i.e. sum of positive and negative differences is considered to be the turnover. In the case of Options, the turnover is the sum of absolute profit and sales values.Tax Audit Applicability, ITR Form and Carry Forward LossFor Tax Audit, the taxpayer must appoint a Chartered Accountant to:Prepare Financial StatementsPrepare and File Tax Audit ReportPrepare and File Income Tax ReturnFile your Income Tax Return on Quicko with the help of qualified experts. Reach us at [email protected] for any income tax assistance.Hope this was helpful!

RSU or Restricted Stock Units are shares of the company given to employee free of cost but with some restrictions(as the name suggests). The restriction is that though an employee is granted RSUs on a specific day (such as when he joins a company or gets a promotion) he gets ownership of the shares over a period of time.From our article RSU of MNC, perquisite, tax , Capital gains, eTradeOn Granting of RSUOn Granting of RSU no tax implication. It is just a promise by the employer.Vesting of RSUVesting date is the date on which the predefined percentage of shares get transferred to the employee according to the predefined schedule. Say one is granted 100 RSUs to be vested over 4 years in the ratio 25%/25%/25%/25% on 16 Dec 2013. Then 25% of RSUs i.e 25 stocks of the company will vest on 16 Dec 2014. On the vesting day, the given percentage of RSUs are transferred to employee’s trading account, for example, eTrade or Charles Schwab account for an American MNC. On Vesting, one has to take care of following thingsone has to pay tax based on income slab.the value of shares is considered as income in India.Companies are obligated to deduct taxes for RSUs vested. The most common method of deducting tax is share withholding, where the company withholds enough shares to cover the tax liability and deposits net shares to your brokerage account. This option is called as Sell to cover. Some companies permit other methods, such as cash or sell-to-cover transactionsThe default option is Sell to Cover hence If 70 RSUs are vested then you would get only 49 stocks in your account due to taxation. 30% of 70 = 21 which is taken as tax. So no of shares in the account becomes 70-21=49.For RSUs, the acquisition price or purchase price is zero and so the entire market value of vested shares is treated as income in India as a perquisite. The market value of the shares vested (number of shares vested x Fair Market price X Conversion from Dollar to Indian Rupee) is added to the employee’s taxable income as perquisites. The price at which Stock is given to you is called as the Fair Market Value. All the shares that are vested are used to calculate the Perquiste Income which includes the stocks which were sold for tax. if 70 RSUs are vested then you would get only 49 stocks in your account due to taxation but all the 70 shares will be used to calculate the perquiste income.Calculating Perquiste income for RSUIt is declared in his Form 12BA for the year and is available in your Form 16, as shown in the images below. The Indian company adds it to employee’s Income and charges Tax accordingly. There is no tax liability in the country of MNC. One does not even get Form 1042-S for RSUs.Selling of RSUOne can only sell the RSUs that are vested. On the sale of the vested shares, the profit earned is a capital gain and is therefore taxable in India.For RSUs, the difference between the vesting price or the Fair Market Value and the sale price is the as capital gains.The period of holding begins from the vesting date up to the date of saleAs the RSUs of the MNCs are not listed on the Indian stock exchange and no STT(Security Transaction Tax) is paid so the definition of a long term and short-term capital gains is different from the shares listed on Indian stock exchange like BSE and NSE.From FY 2016-17 i,e for the sale of unlisted shares on or after 1st April 2016 UNLISTED equity shares is given below. This capital gain must be declared in Schedule CG of ITR-2 or ITR-4 so that tax may be suitably chargedshort-term capital assets – when sold within 24 months of holding them. Short-term gains are taxed at employee’s income tax slab rateslong-term capital assets – when sold after 24 months of holding them. Long-term gains are taxed at 20% with indexationOne may have to pay Advance Tax on sale of RSUs

Income from derivative transactions are taxed as business income irrespective of the volume or turnover. If you’ve traded in derivatives, ITR 4[1] (the form for reporting business income) needs to be filled. Even if you’re a salaried person, you’ll still need to fill ITR-4 if you’ve engaged in any F&O trades in the last FY.Under Section 43(5), a business is categorized as speculative or non-speculative.[2]Speculative business income: Income from intraday equity trading is considered as speculative.Non-speculative business income: Income from trading F&O (both intraday and carryforward) on is considered as non-speculative business. F&O is also considered as non-speculative as these instruments are used for hedging and also for taking/giving delivery of underlying contract.Maintenance of Books of accountsAll the transaction carried out need to be recorded. This includes buy/sell transactions, expenses like electricity bills, demat charges, phone bills, advisory fee etc. In case a trader is involved in multiple forms of trading in shares like intraday trading, F&O, making investments in MFs, holding shares for more than twelve months from the date of purchase, the business income from each of these must be declared separately since the tax treatment differs based on the type of dealing. The common expenses can be bifurcated depending on the proportion of time spent on the various types of trades.How do you calculate your trading turnover?For every trade, contract notes are issued which show the value of assets bought or sold. While for the recording purpose only the difference between is used. Take this example:Anurag bought one lot of Maruti ports at 2.0 lakhs and sold it for 2.8 lakhs (Profit = Rs 80,000)Anurag bought one lot of SBI at 3.5 lakhs and sold it for 3.00 lakhs (Loss= Rs 50,000)The turnover shall be calculated as Rs 80,000 + Rs 50,000 = Rs. 1.30 lakhs. [3]Also, any premium received when you’re writing a option must be added to the turnover value.When is an audit mandatory?When the turnover from F&O trading exceeds Rs 1 crore (Section 44AD)[4] or if profits are less than 8% of the trading turnover (and your other income is above taxable limit), the accounts need to be audited by a practicing Chartered Accountant.Tax Computation for AnuragLet’s say Anurag works for Minance and has earned a salary of Rs 15 lakhs in FY 2015-16 (yeah, I wish!)Anurag opened a trading account with a brokerage firm by paying Rs 5,000 as account opening charges. He has to pay 0.02% as brokerage charges for each F&O trade and paid a total of Rs 98,000 as brokerage charges during the year. He also attended a workshop for F&O beginners and paid the organizers Rs 7,000 for it.Anurag has mobile expenses of Rs 36,oo0 (because he talks a lot) for the whole year and a review of his past bills indicates about 50% of his bill is towards his F&O trade. His monthly internet bill is Rs 1,200. He met a consultant who specializes in F&O and had a dinner worth Rs 2,000 with him.His total turnover is Rs. 1.2 crores and since he’s a horrible trader, his losses are Rs 3 lakhs. Here’s what happened next:His F&O trades is treated as a business. He will have to file ITR-4 instead ITR-1 (form for income from salaries, house property, interest and other sources)[5] that he files normallyAnurag can claim expenses of F&O from his income (or loss), which are directly related to F&O his tradingLosses have tax benefits (they can be offset with certain other incomes and can be carry forwarded for 8 succeeding years)Since Anurag’s turnover is more than Rs 1 crore, he must get an audit done from his CA. He also has to maintain books of accounts for his trading activity.Table 1: List of expenses incurred for F&O trading by Anurag.Table 2: Net income from Anurag’s F&O trading business. Remember I made a loss of Rs 3 lakhs because I’m a horrible trader? That’s the first item. The second team is the net expenses brought forward from the grand total of Table 1.Table 3: F&O trading is considered as a non-speculative business, can be set off with other incomes such as rental income, interest income. Any loss which is unadjusted here (the Rs 14,000 portion) can be carried forward to 8 succeeding years. In these 8 years it can only be set off against non-speculative business income.Treatment of losses from the F&O trading business and how it affects tax liability?Reporting losses can help you bring down the tax liability. Since F&O trading is counted as a non-speculative business, loss from F&O trading is allowed to be adjusted against income from any other source (except salary income).Note: Losses from a speculative business such as day trading cannot be set off against any income other than income from a speculative business.If the loss is not fully adjusted it can be set off against income under any other source like Income from House Property, Income from Capital Gains etc, except under the head Salaries. If the loss still couldn't be adjusted fully in the year in which it was incurred, the unadjusted loss can be carried forward for next eight years immediately succeeding the year in which it was incurred and be set off only against the head Profit and gains of business and profession for non-speculative business.Consequences of non-compliancePenalty of amount upto Rs. 25,000 for not maintaining proper books of accounts.Penalty of 1.5 % of the turnover or maximum penalty of Rs. 1.5 lakhs for not auditing accounts before the specified date (Relevant date is 17th October 2016 for the FY 2015 16).Hat tip: Tejas Khoday and Apoorva Sahu (Chartered Accountant)[6]Footnotes[1] http://www.incometaxindia.gov.in/forms/income-tax%20rules/2016/itr42016.pdf[2] Income Tax Department[3] http://www.caalley.com/gn/30357dtc19988.pdf[4] http://www.incometaxindia.gov.in/Lists/Press%20Releases/Attachments/483/Press-Release-on-Presumptive-Taxation-21-06-2016.pdf[5] http://www.incometaxindia.gov.in/forms/income-tax%20rules/2016/itr12016.pdf[6] Chartered Accountants in Bangalore - Sahu & Associates