Question ID :
42191
How to Present Profit & Loss Statement in case of Income from Future & Options Trading in Income Tax
As per Sec 43 and guidance note issued by ICAI on TAX audit us 44AB Turnover in case of Trading in Future & Option is to be calculated by taking absolute total of net profit/loss for the transaction .
My Query is that in case i compute turnover as stated above, What items or expenses shall construed as deduction from turnover to derive the net profit/loss as the case maybe or how to present them for disclosure in the income tax return filed ???
Also, In case of loss where the turnover is less than 1 crore or other specified limits as the case maybe is Tax Audit u/s 44AB mandatory,if yes then under which clause ??
Posted by
SHUBHAM GARG
on
Dec 12, 2021
Filed Under
DIRECT TAXES
Turnover Mean
(i) The total of favourable and unfavourable differences shall be taken as turnover.
(ii) Premium received on sale of options is also to be included in turnover. However, where the premium received is included for determining net profit for transactions, the same should not be separately included.
(iii) In respect of any reverse trades entered, the difference thereon,should also form part of the turnover.
1. What Items Or Expenses Shall Construed As Deduction From Turnover To Derive The Net Profit/Loss As The Case Maybe -
Brokerages and all other expenses deducted or charged in contract note + Normal Business expense like telephone, Internet Bill, Salary if an employee is hired for doing f&o trading, Depreciation on laptop/computer, Mobile, Rent Etc.
2. How To Present Them For Disclosure In The Income Tax Return Filed -
In ITR > Trading Account- Credit side>other operating revenue> " Future Turnover, Option Turnover" As Sales,
Debit Side> Purchase> Option buying value, Direct Expenses> Brokerage & Other Direct exp,
Profit & Loss Account> Indirect Exp> Depreciation, Salary, Light Bill etc.
3. In Case Of Loss Where The Turnover Is Less Than 1 Crore Or Other Specified Limits As The Case Maybe Is Tax Audit U/S 44AB Mandatory-
Not mandatory upto 10 crore Turnover for Individual/HUF
Posted by
ANANDKUMAR DINESHBHAI THAKOR on
Sep 04, 2022