When trading is declared as business income, the business income is added to the other income sources and taxes are levied accordingly. Let us consider person X with the following details.<\/p>\n
Salary \u2013 INR 12,00,000
\nShort term capital gains from delivery-based equity \u2013 INR 2,00,000
\nProfits from F&O trading -INR 50,000 (Business Income)
\nIntraday equity trading \u2013 INR 50,000 (Business Income)<\/p>\n
To find out the tax liability, we need to find out the total income which is found out by adding salary and business income.<\/p>\n
Total income = 12,00,000 (Salary) + 50,000 (Profits from F&O Trading) + 50,000 (Intra-day equity trading) = INR 13,00,000
\nMr. X now has to pay tax on INR 13,00,000 based on the tax slabs which are as follows.<\/p>\n
![\"tax](\"https:\/\/www.paytmmoney.com\/blog\/wp-content\/uploads\/2021\/06\/Tables.png\")
<\/p>\n
<\/p>\n
Hence tax = 12,500 + 100,000 + 90,000 = INR 2,02,500\/-<\/p>\n
Now there is additional income tax on short term capital gains from delivery-based equity. This additional income has not been counted in business income. INR 2,00,000 will have a tax rate of 15%. So, the resulting tax liability is 30,000.
\nTotal tax = 2,02,500 + 30,000 = 2,32,500<\/p>\n
Now we will explore some factors that one has to be wary of when declaring trading as business income for taxation.
\nWhen can business losses be carried forward:<\/p>\n
Speculative Loss (Equity intraday):<\/strong><\/p>\n Non-speculative losses (F&O Trading):<\/strong><\/p>\n <\/p>\n Disclaimer – This content is purely for informational purpose and in no way advice or a recommendation. Investment in securities market are subject to market risks, read all the related documents carefully before investing. In this blog, we will try to understand all things related to taxation when trading is declared as a business income. Trading income declared as business income can be classified into two categories: Speculative business income: Intraday equity trading income is considered as speculative. Non-speculative business income: By definition, income from trading F&O is consideredContinue reading “Taxation on Trading as Business Income”<\/span><\/a><\/p>\n","protected":false},"author":21,"featured_media":2310,"comment_status":"open","ping_status":"open","sticky":false,"template":"single-classic-ns.php","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-2308","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fno"],"_links":{"self":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts\/2308","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/comments?post=2308"}],"version-history":[{"count":0,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/posts\/2308\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/media\/2310"}],"wp:attachment":[{"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/media?parent=2308"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/categories?post=2308"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.paytmmoney.com\/blog\/wp-json\/wp\/v2\/tags?post=2308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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