Thread by @sujit_bangar

Taxation of Futures and Options transactions is most confusing with more myths prevalent that facts ! (1/9)
#ThingsToRememberThisTaxSeason
@TaxBuddy1

In case of a loss, you may not need to pay tax, but still you have to file an income tax return.
It has major benefit. You can carry forward the loss to next year. (2/9)
#ThingsToRememberThisTaxSeason
@TaxBuddy1

Income earned in F&O trading is treated as normal business income. Therefore, a basic exemption limit is available to individuals. (3/9)
#ThingsToRememberThisTaxSeason
@TaxBuddy1

As an individual, you can claim all eligible tax saving deductions under Section 80C in respect of income from F&O, just like any other normal business income. (4/9)
#ThingsToRememberThisTaxSeason
@TaxBuddy1

If u ve only losses from F&O trading, you need not do audit as long as your F&O turnover is less than the prescribed limit. However, you should file ITR before the due date so that you can carry forward this loss for future years. (5/9)
#ThingsToRememberThisTaxSeason
@TaxBuddy1

Common misconception about requirement of audit in F&O:-
The general rule says that an audit is needed if turnover is more than ₹1 cr.
This turnover limit is increased to ₹10 cr if more than 5% transactions are through bank. (6/9)
#ThingsToRememberThisTaxSeason
@TaxBuddy1

We all know in F&O, all transactions are through banking channels and so an audit won’t be needed till turnover is less than Rs 10 cr. It’s very important to note this. (7/9)
#ThingsToRememberThisTaxSeason
@TaxBuddy1

Traders are often confused about turnover in case of F&O transactions. Common misconception is to consider total transaction value as turnover.
But this is not so. The absolute value of profit and loss is counted as turnover. (8/9)
#ThingsToRememberThisTaxSeason
@TaxBuddy1

While calculating taxable profit from F&O transactions, you can take deduction of incidental expenses incurred while carrying out these transactions. (9/9)
#ThingsToRememberThisTaxSeason
@TaxBuddy1

My interaction with Financial Express on Taxation of Futures and Options 👇
financialexpress.com/money/income-t…

*less than 5% transactions through cash