Legality issue in operating trading account
What is illegal insider trading?
Insider trading is the trading of a company’s stocks or other securities by individuals with access to confidential or non-public information about the company. Taking advantage of this privileged access is considered a breach of the individual’s fiduciary duty.
What is the problem with insider trading?
The main argument against insider trading is that it is unfair and discourages ordinary people from participating in markets, making it more difficult for companies to raise capital. Insider trading based on material nonpublic information is illegal.
Why is insider trading unethical and illegal?
The two most important reasons why insider trading is illegal is because 1) it puts the interests of the insider above those to whom they owe a fiduciary duty, and 2) allows an insider to artificially influence the value of a company’s stocks and misrepresent the company on a global scale.
Why trading account is suspended?
Suspended trading occurs for many different reasons, including: A lack of current, accurate, or adequate information about a company, such as when it’s not current in its filing of periodic reports. Questions about the accuracy of publicly available information, including the contents of recent press releases.
Is insider trading legal in India?
Insider trading in India is prohibited by the Companies Act, 2013 and the SEBI Act, 1992. SEBI has formed the SEBI (Prohibition of Insider Trading) Regulations, 2015 which prescribe the rules of prohibition and restriction of Insider Trading in India.
What are two types of insider trading?
However, there are two types of insider trading. One is legal, and the other is illegal. Legal insider trading is when insiders trade the company’s securities (stock, bonds, etc.) and report the trades to the authorities such as Securities Exchange Commission (SEC).
What happens if trading is suspended?
It only means they are not allowed to trade on an exchange. Suspension of a company from trading, by the exchange, might be for several reasons but if the suspended company complies with all regulations, the suspension will be revoked and the shares will start trading again.
How long can trading be suspended?
ten business days
The federal securities laws generally allow the SEC to suspend trading in any stock for up to ten business days. This bulletin answers some of the typical questions we receive from investors about trading suspensions.
How do I reactivate my trading account?
Investors can send copies of PAN card and AADHAR card to the company’s head office and can follow the instructions given by the office to reactivate their trading. In this way, an investor can reactivate their trading account without any trouble.
What happens if trading or demat account not closed?
If there are no holdings and still you have an inactive account, then you are not allowed to open another account. Your brokers (DP or depository participants) hold your dormant account until you deactivate it. They will bombard you with the statement of Demat account and remainders.
Can I reopen closed demat account?
To reactivate your demat account, you will have to fill a reactivation form and submit Know Your Customer (KYC) details such as address proof and identity proof. Your DP will also verify if your signatures match the original records. Your DP might charge a fee to reactivate it. This varies from DP to DP.
Why NSE is disabled for your account Zerodha?
Why am I getting the message “This exchange segment is not enabled for your account” even though my account is opened? This happens because your equity/commodity accounts are not synced with the exchange. Once your account is opened, it takes up to 24 working hours for your accounts to get synced with the exchange.
Can housewife open trading account in Zerodha?
No, unfortunately, this won’t be possible.
Why MIS is blocked in Zerodha?
Zerodha (Trade with the best stock broker)
The MIS orders on some scrips are blocked in Zerodha on account of the below reasons: Trade to Trade stocks. Stocks under Additional Surveillance measures (ASM) Stocks under Graded Surveillance Measures (GSM)
Is income proof required for Zerodha?
As per this SEBI Circular on Anti-Money Laundering , stockbrokers are required to ensure that your latest income details are available to support your trading activity. Zerodha is also required to collect financial proof from all clients intending to trade in the F&O segment (including Commodity derivatives).
Can students open trading account?
Yes, students can invest in stocks of other companies. There is no minimum age to invest in the stock market, and both minors and adults can buy and sell stocks.
Can I have 2 Zerodha accounts?
No, individuals cannot open multiple trading accounts with the same PAN with any brokerage firm in India. As per the Securities and Exchange Board of India (SEBI) regulations, a PAN can be linked with only one trading account opened with a broker.
Is ITR necessary for demat account?
Yes, you read that right. The income proof is only mandatory in cases where you intend to trade in derivatives of assets and in the currency markets.
Is it compulsory to file ITR for share trading?
Security traders can declare 6% of the turnover), then you will be required to file ITR 4. However, you will be required to file ITR-3 if you declare your F&O income as presumptive business with capital gains.
How can I open a trading account without proof of income?
You can submit your Passport, Aadhar Card, Voter ID< Driver's License, etc. as your address proof. To link your Demat account and your trading account, bank proof is required. Besides, if you purchase shares in a company that provides dividend interest, the amount will be credited to your bank account.
Is money in my trading account taxable?
Yes, you have to pay tax on shares if you sell and reinvest with Demat. Reinvestment does not take away your tax liability. But, you can enjoy exemption from taxes if your long-term capital gains are up to ₹ 1 lakh.
How do I report trading income?
Report your capital gains and losses on Form 1040, Schedule D if you do not elect the “mark-to-market” method of accounting. This form is used to report your trading activity. You must report any gains and losses on this form, even though you reported profits and losses from a business on Schedule C.
Is trading taxable in India?
Therefore, the total tax liability of the trader including income tax on intraday trading profit: Total tax liability = Income Tax + Capital Gains Tax = Rs. 262500 + Rs.
Example 1.
| Individuals up to the age of 60 years | |
|---|---|
| Income slabs | Tax Rates |
| Rs.5 lakh – Rs.10 lakh | 20% = Rs.1 lakh |
| Rs.10 lakh and above | 30% = Rs.1.5 lakh |