ST da/Seniors/CAs,
Do we have a clear cut section/rule to calculate turnover in F&O or is it still a grey area?
I have gone through material on net about the ways to calculate turnover in F&O. I have also gone through material on Taxation by Zerodha.
If I am correct, its aggregate or absolute sum of both positive and negative differences from trades is to be considered as a turnover.
If calculated by this way, I don't think it will cross 1 crore for most traders.
I have read about 2 cases (while reading about taxation of stock markets on net) where people calculated turnover by the method mentioned above, filed ITR and have received notice from IT dept regarding turnover and audit. In both notices, turnover in F&O is not calculated by the above mentioned way. Its buy side value + sell side value. By this method, it will easily cross crores. If someone trades intraday in 3-4 contract, turnover will be huge.
I hope people who trade in F&O, file return by calculating turnover (aggregate or absolute sum of both positive and negative differences from trades) by which turnover is less than crore and generally no audit is required assuming profit is greater than 8%.
But, if turnover is calculated by other way (buy side value + sell side value), it easily crosses crores and there are chances that many of us might receive this type of notice in future and end up paying penalty for not getting audit done.
Thanks,
Gaurav
Do we have a clear cut section/rule to calculate turnover in F&O or is it still a grey area?
I have gone through material on net about the ways to calculate turnover in F&O. I have also gone through material on Taxation by Zerodha.
If I am correct, its aggregate or absolute sum of both positive and negative differences from trades is to be considered as a turnover.
If calculated by this way, I don't think it will cross 1 crore for most traders.
I have read about 2 cases (while reading about taxation of stock markets on net) where people calculated turnover by the method mentioned above, filed ITR and have received notice from IT dept regarding turnover and audit. In both notices, turnover in F&O is not calculated by the above mentioned way. Its buy side value + sell side value. By this method, it will easily cross crores. If someone trades intraday in 3-4 contract, turnover will be huge.
I hope people who trade in F&O, file return by calculating turnover (aggregate or absolute sum of both positive and negative differences from trades) by which turnover is less than crore and generally no audit is required assuming profit is greater than 8%.
But, if turnover is calculated by other way (buy side value + sell side value), it easily crosses crores and there are chances that many of us might receive this type of notice in future and end up paying penalty for not getting audit done.
Thanks,
Gaurav