I’m a retired govt worker and do share buying and selling. How revenue tax is calculated?

I’m a retired authorities officer and have revenue from Pension. I’m doing buying and selling in fairness shares. I don’t wish to declare any bills for my ‘Share Trading Activity’. Can I pay tax at flat fee of 15% on my revenue from share-trading or this revenue would first be added to my pension revenue after which tax can be calculated as per regular slabs?

The brief time period capital positive factors on listed shares are taxed at flat fee of 15%. Whether a selected revenue from listed fairness is to be handled as enterprise revenue or capital positive factors has been material of giant litigation. In order to scale back such litigation, the CBDT has issued a round in February 2016 stating that whether or not the revenue from listed share must be handled as enterprise revenue or capital positive factors, the primary alternative is with the tax payer and the assessing officer is sure to simply accept the selection so made. Such alternative can solely be made in case the shares are held for greater than 12 months. However, this round doesn’t cowl your case. So whether or not your buying and selling revenue can be handled as enterprise revenue or capital positive factors will rely upon numerous components like the common holding interval, quantum of transactions, supply for making the investments and many others. However, in case the quantity of transactions shouldn’t be very big and you’ve got used your personal cash, the identical will be handled as brief time period capital acquire. Please be aware that the identical needs to be selected the idea of evaluation of all of the details taken collectively.

Any revenue made on transactions squared off on the identical day are handled as speculative revenue and any revenue/lack of that nature should be segregated. In case the web results of such transactions is income, it will likely be handled like your common revenue and can get taxed at slab fee. In case it’s loss the identical can’t be set off towards another revenue besides speculative income throughout the identical yr. Such loss can nevertheless be carried ahead for 4 years to be set off towards speculative income solely future.

Balwant Jain is a tax and funding professional and will be reached on jainbalwant@gmail.com and @jainbalwant on Twitter.

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