🎯 “From Farm to F&O: How a Farmer Got a â‚ą69 Crore Tax Notice Despite Losing Money”
Imagine working hard in your fields, and one day receiving a tax notice demanding ₹69 crore—even though you didn’t make a profit. Sounds bizarre, right? But this actually happened to a farmer from Karnataka, and his story holds an important lesson for everyone—especially those who invest or trade in the stock market.
🌾 The Farmer Who Tried His Luck in Trading
Back in 2014, a farmer decided to try his hand in the stock market, specifically in Futures & Options (F&O)—a segment where people trade contracts based on future price predictions. Like many new traders, he didn’t do well and ended up losing ₹26 lakh.
Thinking there’s no need to tell the government about losses, he didn’t file his Income Tax Return (ITR). No profits = no tax, right?
Well, not really.
🧾 Turnover ≠Profit: What Went Wrong?
Here’s the catch: in the world of F&O, the “turnover” isn’t the same as your profits. It’s the total value of all trades, regardless of whether you made money or not.
In his case, his trades added up to ₹69 crore in turnover—even though he actually lost money.
Since he didn’t file any ITR, the tax department assumed he earned ₹69 crore and sent him a tax notice demanding the applicable tax on that amount.
🚨 The Bigger Problem
To make things worse:
- He didn’t respond to any of the notices.
- So the tax officers passed an ex parte order (a decision made without hearing his side).
- His bank accounts were frozen, and now he’s being asked to pay 20% of the demand just to appeal the case.
And all of this, even though he made a loss.
🕵️‍♂️ Not Just One Case
Sadly, this isn’t a one-off case.
- A farmer in Mathura got a â‚ą30 crore tax notice due to PAN card misuse.
- Even juice sellers and small shopkeepers have received notices worth crores—some due to cyber fraud, others due to lack of awareness.
đź’ˇ What Can We Learn?
Whether you’re a trader, investor, or just someone who’s trying something new in the financial world, here are 3 takeaways:
- ✅ Always file your ITR – even if you made a loss.
- 📚 Know the rules – F&O trading is treated as a business by the Income Tax Department.
- 📨 Respond to notices quickly – silence can turn mistakes into disasters.
📢 Final Thought
This farmer’s story is not just about a tax notice—it’s about financial literacy in the digital age. If you’re trading—even with small amounts—you’re playing a big game. Learn the rules before you play, and always stay informed.
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