How to save taxes on the trading profits for an individual
4 Legit ways to retain most of the trading income: 🧵
Collaborated with @AdityaTodmal
1. Divide your capital amongst your family members:
• Ensure they are not salaried employees as they might not be allowed to trade as per their employer's policy.
• Your family is your strength, not just emotionally, but financially too.
• E.g. your net taxable income works out to Rs. 50 lacs, as per the new tax regime, you are in the 30% tax bracket.
However, if you divide the capital amongst your family members in such a way that the net taxable income works out to Rs. 12.5 lacs per member (assuming 4).
This way the tax bracket gets shifted from 30% to 20%, clear saving of 10%
2. Expenses a trader can claim:
All the expenses directly related to the trading business can be claimed.
i) Rent Expense: If one has an office on rented premises, rent paid is a valid expense. However, you should have the rent receipts & rent agreement as valid proof.