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Understanding IIFL Tax P&L Report

You can download the IIFL Tax P&L Report from Quicko’s tax planner on the tax P&L tab. The report includes details of segment wise trading – scrip name, buy value, sell value, and trading expenses. Segments included are – Equity Shares, Mutual Funds, Equity Intraday, Futures and Options.

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Income Head

Capital gain covers gain or loss from the selling of Equity Shares (except intraday transactions), Mutual Funds (MF), Restricted Stock Units (RSU), Equity Traded Funds (ETFs), and Employee Stock Option Plans (ESOPs).

Business Income Head covers Equity Intraday transactions, Futures and Options. This Tax P&L Report can be used to prepare P&L A/C to report it in the Income Tax Return.

However, the trader must take care of the following things where the treatment as per Income Tax may differ.

Expenses

In the case of Intraday and F&O, you can also claim other expenses – such as internet expense, legal fee, subscription expenses, depreciation, etc which are not covered in the Tax P&L Report.

Calculation of Long Term Capital Gains under Section 112A

LTCG on the sale of securities (on which STT is paid), bought on or before 31st Jan 2018 should be calculated using the Grandfathering Rule. As per this rule, the Cost of Acquisition is computed after considering the FMV as on 31st Jan 2018 as per Section 112A.

For equity and mutual funds transactions, long term capital gain is computed after taking into FMV as on 31st Jan,2018. 

  • Corporate Actions: 
    • Buy back Gains: When a company buys back shares issued by it from an existing shareholder, it results in capital gains for the shareholder. Such buyback gains would not be included in the Tax P&L Report.
    • As per a recent amendment in Budget 2019, the gains from buy-back are exempt in the hands of the individual since the company is now liable to pay the buyback tax under Section 115QA. This amendment is applicable to all the buybacks after 5th July 2019. Therefore, buyback gains before 5th July 2019 are taxable for the trader and the ones after 5th July 2019 are exempt
  • Dividend: Dividend transactions would not be included under the Equity segment in the Tax P&L.
  • Transfer In/Out: If you moved your portfolio from another broker to Angel Broking or vice versa, your brokers will have partial data (either buy-side or sell-side depending on transfer in or out). Most of the brokers let traders enter such missing data. However, there are high chances of missing out Capital Gains arising out of such transfers. 
  • Calculation of Trading Turnover:
    • There are two different methods to calculate turnover for Intraday and Futures & Options:
  • Scripwise Method:
    • You calculate the turnover by collating all trades on the particular scrip for the financial year, find the average buy/sell value, and then determine the turnover.
  • Tradewise Method:
    • You calculate the turnover by summing up the absolute value of profit and loss of every trade done during the year.

You can learn more about scripwise and tradewise trading turnover calculation

Intraday

Trading in the stock market on a same-day basis. Thus, it would mean buying and selling on the same day itself.

Turnover 

For all intraday transactions, the aggregate or absolute sum of both positive and negative differences from trades is to be considered as a turnover.

Profit/Loss

Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.

Net P&L = Gross P&L – Transfer expenses.

Futures & Options

In the Tax P&L report, F&O turnover and P&L is computed by considering the following trade segments:

  • Equity Futures & Options
  • Commodity Futures & Options 
  • Currency Futures & Options

Turnover

For Futures transactions, Turnover = abs(sell value – buy value).

For Options transactions, Turnover = abs(sell value – buy value) + sell value.

*abs() stands for absolute value. 

Profit/Loss

Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.

Net P&L = Gross P&L – Transfer expenses

All of the above conditions are considered when you file your Tax Return using Quicko. However, reporting may vary depending on your specific situation, hence it’s always advisable to consult a tax professional when in doubt.

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Pay the 2nd Installment of Advance Tax before 15th September

Have you received a notification from the Income Tax department regarding the payment of Advance Tax? Well, fret not, you are not the only one. The ITD has been sending these notifications as a reminder to taxpayers who have paid Advance Tax in the last Financial Year.

The communication also states that the department is maintaining a database to monitor the compliance of the taxpayers. It also contains the details of the Advance Tax paid by the assessees in the last Financial year. 

What is Advance Tax?

Advance Tax is a “pay-as-you-earn” scheme for the periodical payment of your yearly tax in advance. It needs to be paid if your outstanding Tax Liability is INR 10,000 or more. Advance Tax can be paid in 4 equal instalments at an equal time gap.

The following table shows the due date of paying Advance Tax for each quarter

Due Date of Installment Amount Payable
On or Before 15th June 15% of the Advance Tax
On or Before 15th September 45% of the Advance Tax
On or Before 15th December 75% of the Advance Tax
On of Before 15th March 100% of the Advance Tax

The due date to pay the second instalment of Advance Tax is quite near and the ITD had sent this notification as a reminder for people to pay the second instalment of Advance Tax.
Wondering how to calculate Advance Tax? Check out our Advance Tax Calculator

Who has to pay Advance Tax?

Any individual having an outstanding Tax liability of INR 10,000 or more is liable to pay Advance Tax.

Individuals having only salary income usually don’t have to pay advance tax, since their employers deduct TDS. However, what is often overlooked is the fact that if a salaried individual has income from other sources like trading, investment, rent then that person may be liable to pay Advance Tax as well. In other words, having any sort of non-salaried income may make one eligible for paying Advance Tax. 

Advance Tax for Investors & Traders

Traders are liable to pay Advance Tax for their realised profits & gains. However, given that the income of traders keeps changing every month (every day…actually😅), it can be quite difficult to pay the accurate amount of Advance Tax every quarter. So, they can go for either of the following options

Option 1: Estimate incomes for each quarter

Traders can pay Advance Tax at the end of each quarter by estimating their trading income. If they pay more than their actual liability then they can claim a refund while filing their ITR. If they pay less than the actual Tax Liability, an interest of 1% per month or part thereof on the differential amount has to be paid u/s 234C

Option 2: Pay pending Tax on or before 31st March.

Capital gains can be difficult to estimate. Hence, taxpayers can pay Advance Tax on the realised profit for that quarter. However, later on, if the tax liability is more than what they have paid, they can clear up all their dues on or before 31st March to avoid any interests.

Where does Quicko come in?

Calculating and remembering to pay advance Tax can be quite a task. That’s why our Tax Planner is here to help you out.

  • Log in with your broker
  • Add other Incomes & Tax credits
  • Navigate to Planning & then click on Advance Tax
  • Check out how much Advance Tax to pay, due dates & other details
  • Click on Pay

Yep, that’s it. We have made it that easy for you to calculate and pay Advance Tax😎

Need help with Advance Tax? Well, let our experts guide you through.

Want to know more? We would love to hear you out. Just drop in your contact details & message. We will get back to you with applicable plans, discounts and more in light’s speed (okay that might be an exaggeration, but we promise to get back to you fast enough)

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Is the due date for ITR filing getting extended for FY 2020-21?

One of the most prominent murmurs going on among taxpayers and experts alike is, will the due date for ITR filing get extended? Normally, the due date for filing ITR is 31st July of the assessment year. However, taking into account, the havoc wrecked by covid, the due date was extended to 30th September 2021 where tax audit is not applicable & 30th November 2021 where audit is applicable.

So why are there murmurs of the possibility of it getting extended yet again?

Glitches in the new Income Tax Portal

The ITD launched the new Income Tax portal on 7th June 2021 with a lot of fanfare. The portal with its swanky new interface promised a seamless user experience.
However, it has been a rocky road for the new portal ever since its launch. Taxpayers have been facing difficulties while trying to file their returns as well as while using the other services offered by the portal.

Many taxpayers took to various online platforms, to express their dissatisfaction. This did not go unnoticed by the Financial Minister who urged Infosys, the vendor to step up and resolve the glitches on the new portal at the earliest.

Although several glitches on the new portal have been fixed, some of them still persist making it difficult for many taxpayers to file their returns. The portal went under emergency maintenance on 21st August and was completely unavailable for two days. Filing seemed to have picked up after the portal went live again & an average of 400,000 returns are being filed every day since the past week. Despite significant improvements in the portal and in the number of returns being filed, many taxpayers continue to face glitches on the new portal.

Taking this into account The Finance Minister had summoned the CEO of Infosys for a meeting on 23rd August to seek an explanation for the persisting glitches

Post the meeting, the FM had given Infosys a deadline of 15th September to Infosys in order to fix all the glitches on the portal.

Due dates extended for e-filing of various forms under Income Tax Act

The CBDT has already extended the due date for filing various forms, such as:

  • The due date for uploading of the declarations received from recipients in Form No. 15G/15H during the Q1 FY 2021-22 has been extended till November 30, instead of the previous due date of July 15, 2021 & more
  • The application for registration or intimation or approval under Section 10(23C), 12A, 35(1)(ii)/(iia)/(iii) or 80G of the Act in Form No. 10A now can be filed by March 31, 2022, instead of the prior due date of June 30, 2021. Also the due date for application for registration or approval under Section 10(23C), 12A, 35(1)(ii)/(iia)/(iii) or 80G of the Act in Form No. 10A has been extended to 31st March 2022 instead of 30th June 2021.
  • The Equalisation Levy Statement in Form No.1 for the Financial Year 2020- 21 can be filed by December 31, 2021, as against the prior due date of August 31, 2021 & more

So is the due date for ITR filing getting extended too?

Despite the ITR filing picking up pace, many taxpayers are still struggling to file their returns on the new portal. And if we assume that the portal will be fully functional by 15th September, as per the deadline given by the Finance Minister, that leaves a very narrow window for taxpayers to file their returns.

Experts have pointed out that it would be in the best interest of taxpayers to extend the due date for filing since, it would be difficult for them to get accustomed to the new portal and file their returns, all within a span of 15 days. Although the new portal promises a much quicker filing of returns, the narrow window of 2 weeks can prove to be quite uncomfortable for not only ordinary taxpayers but also CAs.

Not to mention that last year the Government had extended the due date for ITR filing 4 times and the final due date was 10th January 2021.

It must be noted that the extension of ITR filing due date will lead to a chain reaction and the due dates for Audits and other formalities may also get extended.

So do you think the due date for ITR filing for FY 2020-21 will get extended? Share your thoughts with us

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Simplifying Taxes for Angel One Traders

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Filing taxes has always been difficult for traders and investors. Well not, if you are an Angel One trader or investor, you are at the right place! Angel One has partnered with Quicko to simplify taxes for you.

Steps to login with Angel One

After you log on to Quicko’s Tax Planner, under the Tax P&L tab, you can log in with your Angel One credentials, to see all your trades imported.

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All your trades will be imported, categorized under the right income heads of capital gains or business income as per Income Tax Act along with turnover, P&L, LTCG, and STCG. Moreover, you can view your trades in a tradewise or scripwise manner by selecting your option to view the data. Here’s how the P&L will be classified under the income heads:

Capital Gains Head

Income Head – Capital gain covers gain or loss from the selling of Equity Shares (except intraday transactions), Mutual Funds (MF), Restricted Stock Units (RSU), Equity Traded Funds (ETFs), and Employee Stock Option Plans (ESOPs).

LTCG will be computed by applying grandfathering rule as per section 112A under the following asset types:

  • Shares/ESOP/RSU
  • MF/ETFs (Equity)

GrandFathering Rule for LTCG

The cost of acquisition to compute the LTCG on the sale of equity shares, equity-oriented MFs & ETFs shall be calculated by using FMV as on 31.01.18.

Under the LTCG tab in Tax P&L Report, the cost is calculated after considering the FMV and the LTCG shall be calculated as a difference in sales value and buy value while filing ITR.

Transfer Expenses under Capital gain

The transfer expenses (such as brokerages, GST, transaction charges, STT, stamp duty etc.) are given separately under both Equity Shares. However, in the case of Mutual funds, the transfer expenses are included in Buy and Sell Prices.

BuyBack & Dividend Transaction

Buyback of shares and Dividend transactions would not be included under the Equity segment in the Tax P&L.

Business Income Head

  • Equity Intraday:
    • Trading in the stock cash market on a same-day basis. Thus, it would mean buying and selling on the same day itself.
  • Intraday Turnover:
    • For all intraday transactions, the aggregate or absolute sum of both positive and negative differences from trades is to be considered as a turnover.
  • Intraday Profit/Loss:
    • Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.
    • Net P&L = Gross P&L – Transfer expenses.
    • Here, Net P&L and Gross P&L shall remain the same as transfer expenses are adjusted in buy and sale values of respective scrips or trading transactions.
    • Since transfer expenses are adjusted, transfer expenses are disclosed as nil.
  • Futures & Options:
    • In the Tax P&L report, F&O turnover and P&L is computed by considering the following trade segments:
      • Equity Futures & Options
      • Commodity Futures & Options 
      • Currency Futures & Options

There are two different methods to calculate turnover for Intraday and Future & Options:

  1. Scripwise Method: You calculate the turnover by collating all trades on the particular scrip for the financial year, find the average buy/sell value, and then determine the turnover.
  2. Tradewise Method: You calculate the turnover by summing up the absolute value of profit and loss of every trade done during the year.

You can learn more about scripwise and tradewise trading turnover calculation

  • F&O Profit/Loss:
    • Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.
    • Net P&L = Gross P&L – Transfer expenses
    • Here, Net P&L and Gross P&L shall remain the same as transfer expenses are adjusted in buy and sale values of respective scrips or trading transactions.
    • Since transfer expenses are adjusted, transfer expenses are disclosed as nil.

Then, proceed to the ‘Tax Planner’ Tab, where you can enter all of the important information for your case, for Income Situation & Advance Tax both.

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Once you have filled up the necessary information on the Tax-Planner Tab, move to the Tax Returns Tab to continue to file your taxes for the given assessment year. Here, review your tax planning information and click on ‘Prepare ITR’ to prepare and file your return.

Once you have clicked on ‘Prepare ITR’ you will be redirected to Tax Filing App on Quicko.

Know the Steps to File ITR on Quicko.

That’s it, taxes are going to be super simple for Angel One Traders!

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Retrospective Taxation. What's the Hype all about?

On 6th August 2021, the Government passed The Taxation Laws (Amendment) Bill, 2021 burying the controversial Retrospective Taxation. This step has been hailed by many as a step in the right direction towards creating a conducive business environment. 

But as experts delve into the nitty-gritty of the possible impacts that this amendment can cause, let us take a moment to understand what retrospective taxation is and why has it been so controversial.

What is Retrospective Taxation?

Literally speaking, the word retrospection means looking back into the past. So, if we piece together “retrospective” and “tax” it would roughly translate into taxing an activity or transaction that has happened in the past and that is exactly what Retrospective tax is.

It can be a new charge altogether or an addition to the amount that has been charged. Now an obvious question that would come up is why would government tax a transaction that has happened way back in the past?


Well, it is mainly seen as a corrective measure. If the policies in the past and present are different to the extent that taxes collected under the previous policy is deemed grossly less than the present one, then retrospective tax comes into play in order to make up for that gap.

Why is it so controversial?

This provision was introduced in 2012 by the UPA government as an amendment to the Income Tax Act, 1961. This introduction was almost a reaction to the Government’s spat with Vodafone.

Vodafone had acquired Hutch for an $11 billion deal by acquiring the shares of an overseas subsidiary company in 2007. Now, the government stated that the telecom giant owed the ITD around  INR 22,100 crores including taxes and penalties.

Vodafone took the case to the Supreme Court and the Court ruled in favour of Vodafone.

The Government had a similar tussle with Cairn wherein the ITD demanded INR 24,000 crore from the company. Both the companies took the government to the International tribunal with regards to Retrospective Tax and the government lost in both cases.

This tax had proven to be a roadblock when it came to the inflow of international investment in the country and hence there have been constant demands for doing away with this provision. 

What changed?

The Government has introduced an amendment in the 1961 Income Tax Act which calls for burying the provision of Retrospective Tax. It states that no tax demand can be raised in future as per this retrospective amendment for any indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012.

The government has also stated that it stands committed to refund the money that it has collected from this levy.

This move has mostly been appreciated from all circles and is a reflection of the Government’s commitment towards building a conducive and favourable business environment in India. Over the last years, many initiatives have been taken to induce a sense of confidence among Global investors regarding doing business in  India. An increase in foreign investments in the last few years bears witness to the fact that these endeavours have been borne fruit. 

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