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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 11, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Apr 21, 2024Hindi

Retired from public sector bank in February, 2024. I was trading in shares and earned some income through intraday trading & delivery of shares during FY 2023-24. Please guide which income tax return form should be used to file IT Return for the AY 2024-25 and methods be informed to minimise income tax.

Ans: Congratulations on your retirement from the public sector bank! It's a significant milestone worth celebrating. Now, let's address your query regarding income tax filing for the Assessment Year 2024-25.

Given your income from intraday trading and delivery of shares during FY 2023-24, you should file your Income Tax Return using Form ITR-3. This form is specifically designed for individuals and Hindu Undivided Families (HUFs) with income from business or profession.

As a Certified Financial Planner, I understand the importance of minimizing income tax legally. Here are some methods you can consider:

Claiming Deductions: Explore available deductions under Section 80C to 80U, such as investments in Public Provident Fund (PPF), Equity Linked Savings Schemes (ELSS), and health insurance premiums, to reduce your taxable income.

Set Off and Carry Forward Losses: If you incurred losses from intraday trading or delivery of shares, you can set them off against your other income. Additionally, any unadjusted losses can be carried forward to future years.

Avail Tax Exemptions: Certain incomes, like dividends from domestic companies up to 10 lakh Rs, are tax-exempt. Utilize such exemptions effectively to reduce your tax liability.

Maintain Proper Records: Keep detailed records of your intraday trading and share transactions, including purchase and sale invoices, contract notes, and bank statements, to accurately calculate your taxable income and claim deductions.

Consult a Tax Professional: Given the complexities of income tax laws, consulting a tax professional, especially one with expertise in securities trading, can help you navigate the process efficiently and identify additional tax-saving opportunities.

By implementing these strategies and staying compliant with income tax regulations, you can effectively minimize your tax liability while fulfilling your filing obligations.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Question by Syed - Feb 07, 2022Hindi

From last financial I am engaged with share trading profession after quitting my job; When I was a salaried person then it was easy for me to submit income tax return but in share trading I couldn't understand how to submit income tax return. In last financial year I made a profit of around 27 lacs as per the below mentioned head, could you please help me for submitting the return? Long term profit: Rs 5,37,488 Short Term profit: Rs 18,72,324 Speculation: Rs 3,57,009 Dividend Received: Rs 87,450

Ans: As per the income tax laws, gains from sale of equity shares can be either classified as Capital Gains or Business Income depending upon various factors like period of holding and volume of transaction. Hence, if the shares are bought and sold at a relatively higher frequency, it could be taxable as business income and taxed at the normal rate of tax. (Not Capital Gains rate).

Based on the information you have provided; it appears that your income would be treated as business income. You can consult with a Chartered Accountant since this will have a significant impact to you.

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