Further, your daughter is also not liable to file income-tax return as the prize money received by your daughter is below the basic exemption limit to pay tax
My daughter won prize money of Rs 50,000 in a dance competition. Will I have to show this in my income tax returns?
– Shilpa Roy
We have assumed that your daughter is a minor child and has earned only prize money of Rs 50,000 during the year. If any income is earned by a minor child through the application of his skill or talent or manual work, then, such income is liable to tax in the hands of such a child and does not get clubbed in the income of the parents. However, the parents are responsible to the file the income-tax return on behalf of such a child. Thus, you shall not be required to report the prize money earned by your daughter in your income tax return.
Further, your daughter is also not liable to file income-tax return as the prize money received by your daughter is below the basic exemption limit to pay tax. Thus, you shall also not be required to file income-tax return on her behalf.
I have made some losses in my stock market trading this year. When I file income tax can I claim deduction on this? Other than salary I also have rental income from a house I own jointly with my wife
– Amit Bhatia
Taxability of income earned from stock trading may be taxed as capital gains or business income depending on the type of trading undertaken by a person.
If the income is taxed as capital gain, it shall further be classified into long-term capital gains (LTCG) and short-term capital gains(STCG) on the basis of period of holding of the shares by a person. Whereas, if it is taxed as business income, it shall further be categorised into speculative and non-speculative business income.
Please note that the treatment of losses in each of the four categories (LTCG, STCG, Speculative or non-speculative business) is different under the Income-tax Act, 1961. While long-term capital losses can be set off against long-term capital gains only, short-term capital losses can be set off against long-term or short-term capital gains. Also, losses from speculative business can be set off against only income from another speculative business. However, losses from non-speculative business can be set off against income from any other head except salary. Given the limited facts, the category of the losses incurred by you from share trading is not ascertainable.
Chirag Nangia, Director, Nangia Advisors LLP
Send your queries related to personal tax to personalfinance@dnaindia.net.
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