Fire your tax related queries and i would get it solved!!!

[Square]

1. I don't know if they actually providing one, but I have read that "Zerodha" is providing tradewise turnover report. If you have Zerodha account, check again.
2. I have been trying to find a solution for this for years now, but I haven't found one. Even posted a thread here. I guess it's lot tougher than I/you think. I have been doing this manually till date. It's about few hours work every year.
4. If one is an options scalper, most likely he will hit that 2cr mark easily and if in profit likely that would be less than 8% of t/o.
5. Again, it's not easy for an options scalper.
8. I am not sure about this. Just because salary is more than base limit, we should get our books audited? Doesn't that 8% rule come into play here?
Eg: Salary of 4 lakh and derivative loss of 1 lakh with t/o of 10 lakh.
- 4 lakh (salary alone) is more than 8% of t/o (10 lakh)
- if we club both the income, 3 lakh (4 lakh - 1 lakh) is still more than 8% of turnover (I know we can't set off business loss against salary income, just for the calculation).

@canikhil, Can you clarify this (point #8)? I thought I was clear about this taxation matters, Square nicely confused me here

1) I have account with zerodha, they do not provide tradewise turnover, it is contract expiry wise. I do not know about other brokers.
2) Ok. Not you and me, but someone with excel experience can do it. So the downloaded tradewise details in excel file can be directly used in this excel tool to give us FIFO turnover calculation. Worse still if it has to be done manually then too few hours of work each year as you mentioned should be just fine.
4) and 5) I think, option or futures the turnover will be based on net profit and net loss of each trade so it should not matter.
8) Don't confuse salary as a percentage of turnover. It is just not related. Salary is standalone and business is stand alone.

 

[Square]

1) Zerodha gives trade wise turnover also if needed in Q with detailed trade wise calculation.I have been seeing it regularly, it is little more than turnover calculated contract wise.

2)Trading on family members name is ok but if the case comes for scrutiny, the clubbing provisions will apply.It will be difficult to prove that the family member understands f and o and traded in it....so it will be considered as your loss or profit.It may even be considered as Benami transaction.

So we have to think how one takes care of 2 above.

Smart_trade

1) As mentioned in my last post, I didn't see any facility to download tradewise calculation, it was contract wise calculation only. Is this facility given on request? Pls advise.
2) Let me research this, in the mean time.

 

[Square]

1. I don't know if they actually providing one, but I have read that "Zerodha" is providing tradewise turnover report. If you have Zerodha account, check again.
2. I have been trying to find a solution for this for years now, but I haven't found one. Even posted a thread here. I guess it's lot tougher than I/you think. I have been doing this manually till date. It's about few hours work every year.
4. If one is an options scalper, most likely he will hit that 2cr mark easily and if in profit likely that would be less than 8% of t/o.
5. Again, it's not easy for an options scalper.
8. I am not sure about this. Just because salary is more than base limit, we should get our books audited? Doesn't that 8% rule come into play here?
Eg: Salary of 4 lakh and derivative loss of 1 lakh with t/o of 10 lakh.
- 4 lakh (salary alone) is more than 8% of t/o (10 lakh)
- if we club both the income, 3 lakh (4 lakh - 1 lakh) is still more than 8% of turnover (I know we can't set off business loss against salary income, just for the calculation).

@canikhil, Can you clarify this (point #8)? I thought I was clear about this taxation matters, Square nicely confused me here

1) I have account with zerodha, they do not provide tradewise turnover, it is contract expiry wise. I do not know about other brokers.
2) Ok. Not you and me, but someone with excel experience can do it. So the downloaded tradewise details in excel file can be directly used in this excel tool to give us FIFO turnover calculation. Worse still if it has to be done manually then too few hours of work each year as you mentioned should be just fine.
4) and 5) I think, option or futures the turnover will be based on net profit and net loss of each trade so it should not matter.
8) Don't confuse salary as a percentage of turnover. It is just not related. Salary is standalone and business is stand alone.

For point 4) and 5) for calculation of turnover in future and options is same as netting off profit and loss in both futures and options, kindly refer the below link I found on an ad banner on this site tradeji.com itself:
https://cleartax.in/business/partner-fyers
Go to FAQs section for details of turnover calculation.

 

[nac]

For point 4) and 5) for calculation of turnover in future and options is same as netting off profit and loss in both futures and options, kindly refer the below link I found on an ad banner on this site tradeji.com itself:
https://cleartax.in/business/partner-fyers
Go to FAQs section for details of turnover calculation.

In case of options, ICAI guidance suggests to add sell premium along with sum of profits and losses to calculate t/o.

GUIDANCE NOTE ON TAX AUDIT UNDER SECTION 44AB OF THE INCOME-TAX ACT, 1961 (Revised 2014 Edition)​

Derivatives, futures and options: Such transactions are completed without the delivery of shares or securities. These are also squared up by payment of differences. The contract notes are issued for the full value of the asset purchased or sold but entries in the books of account are made only for the differences. The transactions may be squared up any time on or before the striking date. The buyer of the option pays the premia. The turnover in such types of transactions is to be determined as follows:

(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.
(iii) In respect of any reverse trades entered, the difference thereon, should also form part of the turnover.

 

[Square]

In case of options, ICAI guidance suggests to add sell premium along with sum of profits and losses to calculate t/o.

Ok. So we will go by it and can use zerodha turnover report as is, except for the fact that it is contractwise and not trade wise, as far as I know.

Dear Smart trade, can you kindly confirm where to see tradewise turnover in zerodha? I could not find in it q.

 

[Smart_trade]

Ok. So we will go by it and can use zerodha turnover report as is, except for the fact that it is contractwise and not trade wise, as far as I know.

Dear Smart trade, can you kindly confirm where to see tradewise turnover in zerodha? I could not find in it q.

Zerodha gives turnover by both methods Contractwise and tradewise.

For tradewise turnover go to Q--reports---tax report---at the bottom you will see a link with yellow highlighter....that gives tradewise turnover.It gives tradewise Excel sheet which will help in convincing ITO. Tradewise turnover Zerodha introduced based on our traders' demand....it makes things easier for us.

Smart_trade

 

[niftygupshup]

Please do consider impact of clubbing of income here.

Thanks
But among whom clubbing impact will be there.

still awaiting your reply
please reply
and please also reply why clubbing will apply in such cases

Thanks

 

[Square]

Zerodha gives turnover by both methods Contractwise and tradewise.

For tradewise turnover go to Q--reports---tax report---at the bottom you will see a link with yellow highlighter....that gives tradewise turnover.It gives tradewise Excel sheet which will help in convincing ITO. Tradewise turnover Zerodha introduced based on our traders' demand....it makes things easier for us.

Smart_trade

This is great. It is a small yellow link at the bottom. So now there is no need for tally or excel for FIFO calculations. Now everything is readymade. So this piece is taken care.

 

[oi trader boi]

This is great. It is a small yellow link at the bottom. So now there is no need for tally or excel for FIFO calculations. Now everything is readymade. So this piece is taken care.

not taken care yet my friend.
If you are facing any low IQ or corrupt IT officer,they will harass you anyway

 

[oi trader boi]

1. what IT department sees is the gross value of contracts sold ie the notional values of options and futures.

2. So while an officer with knowledge of derivatives may understand your workings, a novice sitting in that powerful position will take time to understand how you have computed your turnover and profit.

3. In many cases, the officers without knowledge of derivatives, do make comments like your turnover was 18 cr (one of the recent tax hearings I had for a client)...the key is to have your documents in place.

4. Having said the above, you cannot rule out a not-so-honest officer may use these gross values to extract some cash out on the grounds that you are otherwise liable for penalty for non-submission of audit report or for wrong books of accounts.

5. In your hypothetical case, even if the officer makes such a remark, what you need to demonstrate is that the same contracts that are showing a gross value sold in his system have been included in the profit & loss account and no contract has been left out.

In many cases, specially borderline ones, we actually do the audit only to avoid such potential harassment.

In such cases they will even ask for a contract notes which is almost 240-250 pages long ??

I think the only solution is-
1)try to earn a good amount from trading
2)get a/c audited with a good CA so that even if something goes wrong CA will appear b4 the IT dept.

The main problem with most us is that,we are small traders and many of us are either making 2-3 lakhs or loosing 2-3 lakhs every year.
Else,getting a/c audited isnt a big deal.

ty