TDS on F&O Gains

Financialexpress

F&O transactions could appeal to greater tax charge

Altering the pinnacle of F&O earnings from ‘enterprise earnings’ to ‘speculative earnings’ will likely be a giant step as a result of will probably be thought of at par with lottery or crypto investments.

That is extraordinarily regarding information. I hope it’s mere hypothesis from a portal to get views.

But when not, it’s a disastrous thought for Indian markets. RBI destroyed flourishing USDINR market with only one round. One thing related might occur right here with this jolt.The most important situation if I’m studying this proper is TDS like cryptos? After we become profitable we get it with tds deducted subsequent day. After we lose, we lose full. Worse, will they implement it contract sensible. Then on a day if I misplaced cash general, I should need to pay tds on the contract wherein I made some cash. That’s horrible.Secondly, flat 30% tax like lotteries. Only one unhealthy thought after one other.

@nithin if in case you have any affect over this, please discuss some sense into them. Make them perceive that hedging just isn’t attainable with out reverse events able to take the wager. About fairness trades – as a layman, I used to suppose why ought to market have intraday orders, why shouldn’t consumers and sellers who need to purchase immediately be paired and that’s it. Then I spotted how liquidity works and the way it improves the scenario for everyone.(This submit is relating to FnO adjustments. I used the fairness instance simply to clear how I used to suppose.)

I hope our ministers and senior officers do not make selections whereas considering like a layman. They’ll’t merely ban one facet of the wager and anticipate that markets will hold functioning as normal. It’ll have broad implications.

However Nirmala tai doesn’t commerce FNO, so it doesn’t matter.

After studying a number of articles on this information buzz, there are 3 main adjustments being mentioned:

Transferring from non-speculative to speculative enterprise head:

As we already know that 90% free cash let’s perceive influence on the ten%. Most of those 10% peeps would have earnings from non-trading actions upto/exceeding the highest tax bracket (10 lakhs underneath previous regime and 15 lakhs underneath new) of 30%, so this modification wouldn’t make any distinction for them and claiming of bills can proceed regardless of to which enterprise head f&o buying and selling is moved

Larger STT for HFT’s with +1000 cr turnover:

I learn this would cut back this occasion of sudden injections/spikes, however I don’t suppose HFTs will likely be discouraged, as an alternative I suppose this could enhance the coordination amongst HFT of us and in the end make the spikes ‘spikier’ in order to cowl the upper fastened value when it comes to elevated STT. Regardless of the case, this can almost certainly enhance the bid-ask spreads as HFTs are main liquidity suppliers

Introduction of Crypto like TDS on F&O transactions:

If this occurs, I don’t suppose HFTs and different market makers can exist anymore. They do 10s and 100s of transactions turning over the identical capital they’ve and picture TDS of 1% on each promote facet of a commerce irrespective whether or not you revenue or free. Now assuming they turnover their capital 10 instances a day and in addition assuming choice writing wants about 12-15x extra capital vs choice shopping for, them being primarily choice writers their capital present would all be used up in 120-150 buying and selling days simply to pay TDS. Both they’ve to herald contemporary capital in bulk or scale back their capital turnover (which might once more add to greater bid-ask spreads) or worst case exit of enterprise. I don’t see crypto like TDS being imposed.