Income Tax - reg.?

Sir ,

With reference to your reply over the question in answers.yahoo.com i got this mail id to ask you a question sir .. I am currently trading with geojit and i am short term investor/gainer, i now got an offer that my boss is trying to invest with me he is providing me some funds and i want to invest him and give him returns i am not a income tax accessee till now and if i get the funds which my boss gives to me and transact him and give him some returns ( without monetary gain but i will some other gain no prob ) means it will come with my PAN id and i will be liable to pay tax if it crosses some amount ( i didn't know the rate ) what i can i do to get a tax exemption i think he is willing to invest 5 lakhs with me can you please guide me with this question ..

Thanks

Kavi

It is important to know the relationship / association with your boss in order to answer this question satisfactorily. However, one of the three scenarios below could be applicable in your case.
1. Your boss is the investor. He will give some funds to you trade with. If you invest the funds on his behalf and take a certain amount as charges for your services and / or also get a commission from the investment company / fund as a fiduciary agent, your tax liability is restricted to such income only, as an investment agent, over and above your tax liability from salary paid by your employer. Your boss may choose to adjust your service charges out of the returns on his investment.
2. You act only as an employee of your boss. The boss gives you a part of his return on investments. It may be clubbed under Income Tax payable on salary and treated as some kind of special pay or allowance.
3. You enter into a partnership with your boss where he does the investment and you do the work. There is an agreement regarding share of the proceeds arising out of the return on investments. The Income Tax rates applicable in case of partnerships are appropriate in such an instance.

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