Tax Implication on Derivates Income

[shiv darshan]

Hi, Greetings! I am an Index Option trader and wanted to understand tax implications on Derivative income. How is derivative income taxed? Would it be better to form a company and register with my broking house and show profit as business income? Are there any benefits to this strategy as oppose to showing profit as speculative income. Secondly, I would also be borrowing funds from my Parents. Thirdly, My discount broker doesn't accept LLP. Please let me know how should I be going about this. Thanks.

AI Summary

Trader Seeks Tax Advice on Derivative Income: Business vs. Speculative Classification and Registration Benefits Explored An individual engaged in index option trading seeks advice on the tax implications of derivative income. They inquire whether forming a company and registering with a broking house to classify profits as business income offers benefits over declaring them as speculative income. They also mention borrowing funds from parents and note that their discount broker does not accept LLPs. The response advises that derivative income is taxed as 'Income from Business or Profession' and suggests consulting a Chartered Accountant for detailed advice on registration and tax benefits.