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

[canikhil]

whether you need the audit or not is subject to how much your other incomes are as well as your overall turnover and profit.

in absence of this information, it cannot be conclusively said whether you need the audit or not.

hi!

please help me understand

I had 5 trades banknifty futures avg buy @ 27100 avg sell@ 27150 lot size say 40 what will be the turnover


same as above but options say 250 trades of banknifty option avg buy 100/- avg sell 120/- and avg lot size say 40 what will be the turnover.?


do I need to go for audit in above scenario?

what is the financial cycle for business mas is it the same like salaried 31 march or something else...please tell financial cycle the tax filling date.

 

[Raj232]

hi!

please help me understand

I had 5 trades banknifty futures avg buy @ 27100 avg sell@ 27150 lot size say 40 what will be the turnover


same as above but options say 250 trades of banknifty option avg buy 100/- avg sell 120/- and avg lot size say 40 what will be the turnover.?


do I need to go for audit in above scenario?

what is the financial cycle for business mas is it the same like salaried 31 march or something else...please tell financial cycle the tax filling date.

for 5 futures trade
(27150 - 27100) x 40 x 5 = 10000

for 250 option trades
{[(120 -100) x 40 x 250] + (120 x 40 x 250)} now calculate it yourself

financial cycle is same for business income and salaried class, ie 31.3

But why is this duplicated : {[(120 -100) x 40 x 250] + (120 x 40 x 250)}

It is supposed to be : [(120 -100) x 40 x 250]
[The sell side clause is exclusively for option sellers who don't buy back causing the option to expire worthless, in that case, the option value (premium) is the turnover ]

 

[traderniftybull]

But why is this duplicated : {[(120 -100) x 40 x 250] + (120 x 40 x 250)}

It is supposed to be : [(120 -100) x 40 x 250]
[The sell side clause is exclusively for option sellers who done buy back causing the option to expire worthless, in that case, the option value (premium) is the turnover ]

ha ha ha
nahi bhai,
thats the ridiculous part of calculating option trading TuOv. I too objected to it, but was .......Leave it, why should I go into the detail.
BTW, it should be like that only, as you have mentioned but ab kuchh logon ki roji/roti (from govt to IT deptt to ...), galat define karne per chalti ho to kuchh nahi kar sakte hain.
Do you have an authentic link, then do share it in the thread/forum, (I hope that its just not your view but a reality)

A similar issue is, loss is profit to be considered as, less than 8% profit. arey bhai loss loss hai and profit is profit. Why defining loss as a negative profit. If they have to define so, then they should remove the term LOSS, altogether. For a trader in loss, double maar parti hai, ek to loss, ooper se audit se related kharcha alag. Many times its good for a trader in loss, to opt for presumptive tax. But in that too, they have put a condition, that one cannot opt out of it, in 5 years.

Bhai, cant write more on ridiculous system of taxation, otherwise they all will be after me DD

 

[traderniftybull]

one more thing
if my TO calculation wasnt right then Nikhi bhai would have said so or corrected it.

 

[harshab]

whether you need the audit or not is subject to how much your other incomes are as well as your overall turnover and profit.

in absence of this information, it cannot be conclusively said whether you need the audit or not.

Thanks . turnover details..one of my broker shows 15000 turnover for 5 bnf futures trades n 16 lakh for 220 weekly option trades.

But one broker shows 16339156 for just 10 banknifty weekly option trades.hence all this headache.no other income

 

[Raj232]

one more thing
if my TO calculation wasnt right then Nikhi bhai would have said so or corrected it.

Not sure if @canikhil is reading all posts, but one of my friends who happened to have assessment did his audit and the calculation was the one which I mentioned.

I think there should be some examples online, but I need to check and will post the link..

 

[traderniftybull]

Not sure if @canikhil is reading all posts, but one of my friends who happened to have assessment did his audit and the calculation was the one which I mentioned.

I think there should be some examples online, but I need to check and will post the link..

Raj bro
plz do it ASAP

 

[Raj232]

Thanks . turnover details..one of my broker shows 15000 turnover for 5 bnf futures trades n 16 lakh for 220 weekly option trades.

But one broker shows 16339156 for just 10 banknifty weekly option trades.hence all this headache.no other income

@harshab : Turnover calculation of "broker" is different from
"turnover for Income tax purpose for tax payer"

 

[Raj232]

Raj bro
plz do it ASAP

if you go online and read what the Tax filing guys have mentioned : they have added the word "PLUS" to substantiate their claim / interpretation :

Incorrect interpretation:
• The total of positive and negative differences , plus <--- incorrect
• Premium received on sale of options is also to be included in turnover ,plus
• In respect of any reverse trades entered, the difference thereon

Read more at: https://www.caclubindia.com/experts/f-o-transactions-turnover-for-sec-44ab--122521.asp

Taxguru has added even more pluses:

• The total of positive and negative differences , plus <--- incorrect
• Premium received on sale of options is also to be included in turnover , plus <--- incorrect
• In respect of any reverse trades entered, the difference thereon But not the total value of contract.

https://taxguru.in/income-tax/how-t...audit-us-44ab-of-the-income-tax-act-1961.html


Correct quotation of the rule:

b) 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.

clearly mentioned in The Guidance note on Tax Audit under section 44AB of the Income Tax Act, 1961
https://resource.cdn.icai.org/30357dtc19988.pdf

However, there is no "plus" mentioned anywhere...

A more reasonable explanation is mentioned here :
https://www.caclubindia.com/articles/tax-audit-of-assessee-in-share-trading-business-34666.asp

 

[abb24]

Dear All learned members - I am doing intraday trading in equities and derivatives regularly. Also,in the current financial yr I made only 2 or 3 trades in these instruments from my wife's demat account too. Unfortunately, have incurred losses in both accounts. We both are senior citizen ( me 70 and She 60+). We have no other source of income except bank deposits and may be some long term income/loss from shares in our demat accounts.
Kindly advise/enlighten me on the following:
1. Is it mandatory to get audit done from CA for both accounts for filing returns.
2. Since CA fees are high ( 30000/-) can I self file the ITR on line at least for my wife ( as there are very few trades)and save 15000/- , if so which ITR Form to be used.

I m a novice and have zero knowledge on taxation matters.For past years this has been handled by my tax consultant.
Thanks and apologies in advance for troubling you all.