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

[SavantGarde]

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

Margin as one might consider....as security deposit for taking a position....Profit/Loss is calculated on the Value....STT again is charged on the value.....therefore one must report the turnover as it appears in the STT Annexure.....there is no escaping.....it is better to do the right once than having to the wrong several times .....ultimately settling to do the Correct thing ....!!!

SG

 

[aggarwal8]

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

SavantGarde, turnover for futures is never calculated on the actual contract value. It is always calculated as the absolute sum of daily profit and loss. So, if one day profit is 100 and next day loss is -50, then turnover is 150 not the contract value. If the actual total contract value (as seen in STT Annexure) is reported as Gross/Sales in ITR-4, an error is given in ITR-4 that "audit information must be completely filled" when in actual fact turnover is less than 100lacs.

This is the error that Phantom is referring to.

 

[SavantGarde]

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

Incase of profit, it is not necessary to Audit...whereas, incase of loss Audit is compulsory, for the purpose of offsetting the Loss....!!!

SG

 

[aggarwal8]

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

SavantGarde, I am referring to profit. I think phantom has also a profit in fno. Turnover is less than 100lacs so no audit is required based on the above calculation. But, if actual contract value is reported in ITR-4, then ITR-4 demands that audit information be filled. This is the problem.

Also, futures loss is business loss and NO audit is required for reporting business loss unless Gross/Sales receipts don't exceed 100lacs. Pleae read this http://www.caclubindia.com/experts/does-a-business-loss-has-to-get-audit--1045689.asp#.UBUC5aAbDDc

Phantom, a humble word of advice... If regular books need to be maintained, and you do not fill out this information, expect a letter from ITO asking for more information. My friend did something similar.

 

[shivramjwala]

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

Very Good Information..Thanks to all.....

 

[sridhar]

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

My CA is very insistent that Derivatives trading is considered under head "Speculation Business". He says thaere is a recent Tribunal decision to this effect.

I had wanted to start trading in my Pvt. ltd. Co.'s a/c. However my Company Secretary now says that a recent RBI circular & The ROC interpretation means that I have to change the Object clause to that of a NBFC & introduce minimum Rs. 2 Crores capital. Anybody have any idea on this? Or any links to relevant notices?

Regards

Sridhar

 

[Tegeltija]

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

Could you tell me best and cheap place for accounting books? I mean ebook? thanks!

 

[Tegeltija]

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

please help! I find this site http://www.505accountingbooks.com but i am not sure is that secure to buy there books? Does any one buy any book there? Any suggestion are welcome...sry for 2 post..

 

[vkmishra]

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

Respected Sir :

I have invested in National Spot Exchange Ltd. for Vyaaj Badla (Cash & Carry Arbitrage) in the Commodities ie. Buy in Cash (T+2) and receive money in Future (T+25).

1. What will be the tax implications
2. There is also element of VAT involved. ie. VAT is debited on purchase and Credited on sale of Goods. Thereafter the broker debits the Difference in VAT.

3. The Broker is not issuing any document for the VAT.

4. The Broker has appoint a CNF agent IBMA for taking care of VAT issues on behalf of all his clients.

What should be the Tax and Accounting Implications of this VAT and the whole Transaction.

As i intend to invest a substantial amount to earn interest (currently around 13.5% pa), I want to be sure of this product.

I thank you in advance.

Best Regards,

Vijay

 

[Mihir Bijur]

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

So, a couple of question on accounting, hope someone can illuminate:
1. In case of open position from 1st to the 20th of a month, we have two entries for Margin -one at the time of entering into the position on the 1st and then on closing the position on the 20th. In addition to that, on a daily basis entries need to be done in MTM till position is closed. Was this correct?
2. We will be using Tally. So, what ledger heads should be created?