Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issues.

[MANISH_DAMANI]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

Hi fno entry part is clear. Can u help me accounting entry for intraday share transaction in cash market which can be justisfied for tax purpose too so that audit turnover problem also be solved? Plz if somebody help me as i very much confused only abt this?

 

[ankur_rohira2000]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

hi
i have to appear for nism series-1 currency derivative exam on 16/10/10 . i was having difficulty in understanding accounting chapter in workbook but 1 of my friends told me that accounting for equity derivatives & currency derivatives
is same as of now . is it true ?

 

[ankur_rohira2000]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

hi
i have to appear for nism series-1 currency derivative exam on 16/10/10 . i was having difficulty in understanding accounting chapter in workbook but 1 of my friends told me that accounting for equity derivatives & currency derivatives
is same as of now . is it true ?
Edit/Delete Message

 

[piyushonline]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

Dear All,
I have done a series of Futures and Options trades in ICICI. The whole data is available in Excel sheet.

I wanted to know, if there is any excel utility which can be used to compute the fields required for ITR 4.

I have a net profit/loss field computed for the FY 2008-2009. The form is asking much more than that.

Really appreciate your suggestions.

Regards

Piyush

 

[deep34]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

For turnover calculation , does the same rules apply for the futures of stocks as for the futures of indices ? The example given in this thread is on nifty futures only.

Also suppose I buy futures of certain stock and hold it for 5 days.I sell it only at the end of 5 days. But i receive a contract note every day from my broker.
On
day 1 + 1000(profit)
day 2 - 2000 (loss)
day 3 -200 (loss)
day 4 - 400 (loss)
day 5 + 2000 (profit) (sold)

net profit/loss at the end of the fifth day is +400 (profit)

So what is the turnover for this transaction ?

Is it 5600(1000+2000+200+400+2000) or 400 (the net balance at the time of selling).

Now after a few days I buy the same future (same stock , same settlement date).

And I suffer 500 rs loss at the end of another 5 days when i sell it .

Now since it is the same future contract the what will be the turnover ?

will it be 400+500 =900
or 400-500= (-100)=100
or it will be calculated on a daily basis as given above ?

Could any one please reply ?

 

[nac]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

^

For turnover calculation just take it as futures (no need to segregate as stock futures and index futures.

Your turnover calculation will be based on closed position. Do not add MTM profit and loss for turnover calculation. If you take position and close after one week, the profit or loss should be taken for turnover calculation not daily MTM...

 

[kapil.aggr]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

^

For turnover calculation just take it as futures (no need to segregate as stock futures and index futures.

Your turnover calculation will be based on closed position. Do not add MTM profit and loss for turnover calculation. If you take position and close after one week, the profit or loss should be taken for turnover calculation not daily MTM...

Dear nac,

I had the same query. Could you pls confirm the source of your knowledge? Any document/IT guideline I may refer to, for exploring the same in detail. Thanks a lot!

Regards.

 

[paripasu]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

hello folks ....kindly solve my problem....I am an arbitregeur ...purchase cash and instantly sell future ....for one month and at the end of one month i do the reverse ie sell cash and buy back future.
So it would be considered interest income ....correct thus far...but I have no other income under any other head. will it still be considered interest income or business income...pls reply. And if not then can i show my income under house property head which is small around 15000 p.a. so that my future and cash arbitrage is still interest income.

 

[mohsin4imam]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

I am a salaried employee and I have made losses of 4 lakhs in futures transactions in the year 2011-2012. Now I want to report these losses in my tax return so that I can set off the losses in the next financial year. Could you please suggest any tax advisor/firm who can advice and help me in filing tax return in Bangalore.

 

[aggarwal8]

Re: Accounting Entries and Taxation for Stocks & F&O-A thread for settling these issu

Yes Phantom. This is the big problem I am facing. What to put in Sales/Gross(1) amount and Purchase(7) amount in ITR-4 in Part PL. I can't put the actual amount since it is over 50 crores. Only thing I can think of is to put the margin amount. For day trading, we need around 4% margin, and for overnight futures trading, it is around 10%. Now, this is the amount that is paid to the broker not the actual amount of the contract.