Feb 24 2021, 05:13 PM
QUOTE(DragonReine @ Feb 24 2021, 10:44 AM)
(stuff below is something I've gleaned from recent article about cryto trading, but it might be relevant here and to those who engage in day trading)
Section 3 of Income Tax Act 1967 says that income from digital platforms like online trading can be taxed. To determine this tax authorities will look to see if the investor meets the criteria of "Badges of Trade" test. Meet too many and your gains from investments might be considered taxable income
Profit-seeking motive: Was the activity carried out with an intent to profit?
Number of transactions: repeated and systematic transactions of buying+selling that can amount to trading activity
Nature of Asset: type, quantity of assets etc.
Existence of similar trading transactions or interests: refers to similarities between your expertise and your occupation with the activity of trading
Changes to the asset: changes to price etc. that makes it marketable?
The way the sale was carried out: is the sale conducted in a way that befits a trading organisation?
Source of finance: Assets purchased using debt/loaned money gets a red flag because you're required to pay off the loan, so profit becomes a necessity (profit seeking motive).
Interval of time between purchase and sale: The longer time between your buying and your selling, more likely it'll be seen as investment (not taxable) instead of trading (taxable)
Method of acquisition: Gifts and inheritance aren't considered trade.
Got people invest not expecting profit one ar? Section 3 of Income Tax Act 1967 says that income from digital platforms like online trading can be taxed. To determine this tax authorities will look to see if the investor meets the criteria of "Badges of Trade" test. Meet too many and your gains from investments might be considered taxable income
Profit-seeking motive: Was the activity carried out with an intent to profit?
Number of transactions: repeated and systematic transactions of buying+selling that can amount to trading activity
Nature of Asset: type, quantity of assets etc.
Existence of similar trading transactions or interests: refers to similarities between your expertise and your occupation with the activity of trading
Changes to the asset: changes to price etc. that makes it marketable?
The way the sale was carried out: is the sale conducted in a way that befits a trading organisation?
Source of finance: Assets purchased using debt/loaned money gets a red flag because you're required to pay off the loan, so profit becomes a necessity (profit seeking motive).
Interval of time between purchase and sale: The longer time between your buying and your selling, more likely it'll be seen as investment (not taxable) instead of trading (taxable)
Method of acquisition: Gifts and inheritance aren't considered trade.
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