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Derivative share taxation ? : Respected Persons & CA : Kindly clarify the points. 1) Can govt.employee trade /


invest in derivative stock market since it's a business income ? if I trade daily 1 or 2 transaction .. can it be the ShortTermCapitalGain ? or it's possible to separate STCG & business income in derivatives transactions ? If I have own house, what are the limits for deductions / depression from the business income for house repair, purchasing furniture, gift to relatives,computer etc.? same is appicable for STCG also ? is it correct that tax audit is required if share trasaction turnover > 40 lackhs ? when the 'clubbing income ' will apply ? ,for giving the gift or loan to my close, non earning relatives for derivative investment ? if yes then how to avoid it ? Regards !

for dertivates, the profits are taxed @ 30 % and it is taxed as business income . And audit is a must.

if u r investing in derivatives then it is speculative business and is covered u/s 28 hence taxble as business income. In no case it can be treated as STCg. no deductions are allowed. u can setoff the losses from speculative business against speculative business only. the expenditures which u have listed do nou fall under section 37 so no deduction. clubbing of income will apply definitely. and how to avoid it? no tax evasion aloowed sorry cant help

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