I am into day-trading these days and wanted to know what the tax implications of such transactions are?
Rakesh Mukhia, Bhopal
Day trading entails gains and losses that are frequent and can be tracked at the end of each day. However, any such gain or loss, unless it is settled is known as speculative income, where you do incur the applicable expenses (including STT) incurred by you when trading. More importantly, as a day trader, you should maintain your books of accounts and trades to have clear details on the gains, expenses and losses you have made. Depending on the value of your trades, you may also be required to have a tax audit on your financial dealings. Such dealing will also call for payment of income tax on applicable tax slab rates, as advance tax at the respective advance tax filing dates. There is some concession for senior citizens on filing advance tax, but there is no harm to be cautious and pay it. In case you do land up with losses at the end of the financial year, the loss can be carried forward and will be allowed to be set-off only against income, if any arising from speculative transactions in the immediately following four financial year.
