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Yes to ques 1.

It is not mandatory to carry forward the loss. It is your choice.

and if book are not mandatory then excel should suffice.
Thanks a lot for your response..........

One more query..........

so in this scenario where I don't want to carry fwd the losses(which are marginally greater than income from interest), which form should I fill ITR1 or ITR4?

If I fill ITR1 showing just the income from salary, will there be any complications in future?

Thanks,
Gaurav
 

diosys

Well-Known Member
Dear Diosys,
I am a salaried employee. I receive income from rent and interest. I have also made losses under derivatives and have following queries.

1. I have incurred losses in FY 2007-2008, FY 2008-2009 and FY 2009-2010 (havent declared any of those losses)

2. I have paid income tax on the rent and interest received.

3. Can I revise my earlier returns and declare appropriate losses.

4. Can I offset FNO losses against interest, rent etc.

5. Revision of return will attract any penalty ? What is the maximum sum.

Appreciate your response.

Thanks
return of Fy 2007-08 cannot be revised as it was only possible to be done till 31-03-2010. However other two years you can revise your return with the missed out losses. Such losses would be allowed to be carried forwarded.

There is no penalty for such revision. Though the chances of your return being picked up for scrutiny becomes higher of a return is revised. Hence my submission is that see if the amount of loss to be declared is not too large then to skip the revision since you might land up in scrutiny.
 

diosys

Well-Known Member
Thanks a lot for your response..........

One more query..........

so in this scenario where I don't want to carry fwd the losses(which are marginally greater than income from interest), which form should I fill ITR1 or ITR4?

If I fill ITR1 showing just the income from salary, will there be any complications in future?

Thanks,
Gaurav
File ITR-4 and in the carry forward column do not carry forward the loss.
 
Hello Diosys,
Thank very much for your response.

1. Is there any excel calculator for computing the loss/profit from the derivative transactions.
I have an excel dump of transactions (buy, Sell and expired contracts) done. Would like to use the calculator to compute the turnover and net tax liability.

2. FY 2008-2009 return was filed using ITR2. I would like to show income loss and will be using ITR4. Is that permissible.

Really sorry for asking so much question, pardon my ignorance.


return of Fy 2007-08 cannot be revised as it was only possible to be done till 31-03-2010. However other two years you can revise your return with the missed out losses. Such losses would be allowed to be carried forwarded.

There is no penalty for such revision. Though the chances of your return being picked up for scrutiny becomes higher of a return is revised. Hence my submission is that see if the amount of loss to be declared is not too large then to skip the revision since you might land up in scrutiny.
 
Last edited:

diosys

Well-Known Member
Hello Diosys,
Thank very much for your response.

1. Is there any excel calculator for computing the loss/profit from the derivative transactions.
I have an excel dump of transactions (buy, Sell and expired contracts) done. Would like to use the calculator to compute the turnover and net tax liability.

2. FY 2008-2009 return was filed using ITR2. I would like to show income loss and will be using ITR4. Is that permissible.

Really sorry for asking so much question, pardon my ignorance.
There would be many such calculators available online, just google for them...or even you can make one...Plus if it was a loss then you simple need to calculate that.

2.) Yes it is permissible to use ITR-4 now.
 
Calculation of Profit/Loss?

I have some doubts regarding the appropriate calculation of Profit/Loss. If possible, please help me understand this......

For example, consider a scenario where some transactions are done in FUTURES which result in a LOSS and some transactions are done in OPTIONS which result in a PROFIT. Following are the details.....

FUTURES transactions -
LOSS = Rs. 15000(L)
Brokerage on BUY transactions = Rs. 3000(B1)
Brokerage on SELL transactions = Rs. 4000 (B2)(This is inclusive of STT of Rs. 1000(STT1))

OPTIONS Transactions -
PROFIT = Rs. 25000(P)
Brokerage on BUY transactions = Rs. 5000(B3)
Brokerage on SELL transactions = Rs. 6000(B4)(This is inclusive of STT of Rs. 1000(STT2))

NOTE: Brokerage includes 'Actual Brokerage'(A), 'Transaction Charges'(B), 'Stamp Duty'(C), 'SEBI Turnover Charges'(D), & 'Service Tax on brokerage'(E) apart from STT as applicable and mentioned above.

Now, in the above scenario what is the actual profit or loss that could be actually considered as Business income or Business loss?

Is it simply P - L or is it P - L - B1 - B2 - B3 -B4 or something else?

Is there any special consideration for STT1 & STT2 in the above scenario?

Is it ok to consider the total brokerage as A+B+C+D+E+STT or only A should be considered?


Extremely sorry for asking too many questions and giving so lengthy examples but these would help me gain some insight into taxation in the best way. Please pardon my ignorance.

Thanks,
Gaurav
 

diosys

Well-Known Member
Re: Calculation of Profit/Loss?

i have some doubts regarding the appropriate calculation of profit/loss. If possible, please help me understand this......

For example, consider a scenario where some transactions are done in futures which result in a loss and some transactions are done in options which result in a profit. Following are the details.....

Futures transactions -
loss = rs. 15000(l)
brokerage on buy transactions = rs. 3000(b1)
brokerage on sell transactions = rs. 4000 (b2)(this is inclusive of stt of rs. 1000(stt1))

options transactions -
profit = rs. 25000(p)
brokerage on buy transactions = rs. 5000(b3)
brokerage on sell transactions = rs. 6000(b4)(this is inclusive of stt of rs. 1000(stt2))

note: Brokerage includes 'actual brokerage'(a), 'transaction charges'(b), 'stamp duty'(c), 'sebi turnover charges'(d), & 'service tax on brokerage'(e) apart from stt as applicable and mentioned above.

Now, in the above scenario what is the actual profit or loss that could be actually considered as business income or business loss?

Is it simply p - l or is it p - l - b1 - b2 - b3 -b4 or something else?

Is there any special consideration for stt1 & stt2 in the above scenario?

Is it ok to consider the total brokerage as a+b+c+d+e+stt or only a should be considered?


Extremely sorry for asking too many questions and giving so lengthy examples but these would help me gain some insight into taxation in the best way. Please pardon my ignorance.

Thanks,
gaurav
p - l - b1 - b2 - b3 -b4
 
An asset is capitalized and depreciation claimed and an expense is written off.

Asset is such which giver recurring advantage to you over a considerable period of time though the money against it has been paid at one time.

In your case since the batteries (because they last for a long period) should be capitalized and depreciation claimed on them @15%.
But as the batteries have to be compulsorily replaced every 2 (minimum) to 4(maximum) years I won't be able to claim the full value of batteries @ 15% per year depreciation within 4 years. If I am right here then wouldn't it be possible to claim 100% of the batteries value as necessary business expense in the year of purchase itself?
 

diosys

Well-Known Member
But as the batteries have to be compulsorily replaced every 2 (minimum) to 4(maximum) years I won't be able to claim the full value of batteries @ 15% per year depreciation within 4 years. If I am right here then wouldn't it be possible to claim 100% of the batteries value as necessary business expense in the year of purchase itself?
Yes you can claim in the first year itself.
 

diosys

Well-Known Member
hi tax guru,

Pls guide ..i want abt tax treatment for

1)How are you treatin futures ka tax ..acc to me its net profit or loss
it includes the STT service tax and brokerage and all.

2)For Options My CA says...its abt just premium paid -premium recived.
no STT not service tax..ya but including brokerages.but in earlier post how are u takin into consideration STT in options Profit/LOSS in the brokerage..

3)How are you gonna treat open positions in options for calculated P?L
in my case considering 5k of open positions my total loss was 12.5k
but open position is not considerd as loss and my actual loss is 5.5k
so earlier when i wanted to file more loss its not gonna happen.
what is the tax treatment for open position

4)My expenses ..i hv 15k worth offical expenses petrol etc will this contribute to more loss i want to file....or they are used just to offset in case of profit only..

pls reply
STT is an expense (amendment made by finance act 2009).

Open position for options is NOT accounted for....

No you can offset or increase your loss also by including these expenses.
 

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