TDS on GST
The Finance dept appears to be working with partial blindfolds, because any time one raises the point for TDS, it is always viewed as Income Tax Deducted at Source. Never ever there is any consideration for GST getting deducted at source.
For a stock market trader, trading in F&O (Derivatives) section, the GST gets deducted in totality at source by the broker, and that too for all transactions of buying AND selling (without any credit for the input tax for GST for buying).
And because this fact is ignored, the laws prevailing for the Income Tax for such transactions are totally mis-fit. These laws consider only the Income Tax, ignoring the GST in totality.
Because if the laws are amended after carrying out proper studies, one would find the changes may NOT make any difference for the collection of Income Tax, but the GST collections shall get multiplied two, three times, or even more, based on the amendments considered.
I am sure than none of the person in the team of Finance dept has ever sat oneself in front of a computer to do one’s own stock trading. Hence all the information is received second hand, or more probably after passing through three-four or more hands. This makes the dept believe something, which has never existed since the online trading has commenced. The department’s theory, which could be true, is only applicable to pre-online operations period, and hence now obsolete.
The depart needs to study the whole matter jointly for IT & GST to arrive at the Income Tax laws, which shall help in collecting maximum of IT & GST collectively.
This has not been either even considered or done. Or else, I would have not been writing this message. more
For a stock market trader, trading in F&O (Derivatives) section, the GST gets deducted in totality at source by the broker, and that too for all transactions of buying AND selling (without any credit for the input tax for GST for buying).
And because this fact is ignored, the laws prevailing for the Income Tax for such transactions are totally mis-fit. These laws consider only the Income Tax, ignoring the GST in totality.
Because if the laws are amended after carrying out proper studies, one would find the changes may NOT make any difference for the collection of Income Tax, but the GST collections shall get multiplied two, three times, or even more, based on the amendments considered.
I am sure than none of the person in the team of Finance dept has ever sat oneself in front of a computer to do one’s own stock trading. Hence all the information is received second hand, or more probably after passing through three-four or more hands. This makes the dept believe something, which has never existed since the online trading has commenced. The department’s theory, which could be true, is only applicable to pre-online operations period, and hence now obsolete.
The depart needs to study the whole matter jointly for IT & GST to arrive at the Income Tax laws, which shall help in collecting maximum of IT & GST collectively.
This has not been either even considered or done. Or else, I would have not been writing this message. more
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One More Point. When we talk about the traders, it does NOT necessarily means that for every trader, the GST for each transaction gets deducted as TDS. In fact all the taxes and levies get deducted at source along with the brokerages charged, and the online trader can have no control over it. The records are available with both, NST &the broker. But it necessarily means for each on the online F&O Trader, whose broker deducts such GST, broker has GST registration, broker’s accounts get audited for each Financial Year (which includes all trading accounts for broker’s clients) and the said client, termed as a online F&O trader and put in a business category, has to get one’s account audited. No problem for getting the accounts audited. But the audit fees are high. Is Finance dept going to get it audited free for everyone of us? The dept cannot even think of a possibility of asking the brokers, that when the broker’s accounts are audited, at the same time, to get each client’s account audited and hand it over to the client at some fixed nominal fees. more
May 22
Dear Shri Sanjeev Goel ji, Thank you for the elaborated explanation. I am very much aware, what TDS means, but if you watch the business channels, all the experts and officials invited always refer TDS strictly to Income Tax. However, you have missed the main point hat I was trying to make. Currently, Income/Loss from F&O Trading is considered by Finance dept as “Business Income/Loss” , which itself is ridiculous. In addition, the Income Tax laws made for this category take care only for filing of Income Tax with/without audit, as the case is. As a result, small online F&O traders like me, try to minimize the orders to take care that stop losses are hit minimal time (because the amount of loss made gets added to the turnover, and accordingly the IT laws become applicable) However, in the event, the Finance dept opens it’s mindset, it will realize, that with proper changes made, there shall not be any impact on the Income Tax getting collected as advance tax from the traders, but the GST collected as TDS shall get multiplied many times. I am sure, that for last three quarters, after the GST was made applicable, the dept has NOT done any checking related to the advance Income tax collected and GST collected as TDS from such F&O traders. And because the dept persons having the authority are always correct and a common man always wrong, such suggestions get totally ignored. Thanks again for your reply. more
May 22
Dear Mangesh Ji first of all I would like to tell you that TDS is meant for Tax Deducted at Source not Income Tax Deducted at Source. Tax may be any of either Income Tax or GST or VAT or any other tax. Now as your query is that Input Tax Credit is not available for the persons dealing in on line stock trading as the Broker is deducting GST TDS on both purchase and sale of stocks. If you are a registered person under GST then only you can claim Input Tax Credit of GST deducted on your purchases otherwise you are not liable for Input Tax Credit. If you want to claim Input Tax Credit on your stock purchases then you have to get yourself registered under GST Act. more
May 22
