Audit of F and O T/O

This query is : Resolved

Quick Summary

This discussion addresses how to accurately present Futures & Options (F&O) trading losses on a Profit & Loss statement, considering total sales, purchases, and charges. It explores two methods: detailing all transactions or directly showing the net loss. The conversation also clarifies whether a tax audit is mandatory for claiming F&O losses, especially when the assessee has previously filed under Section 44ADA and is now subject to audit requirements. It highlights the importance of timely ITR filing for carrying forward losses.

Javed Memon

Javed Memon (Querist)
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31 October 2025 Respected Sir

F & O Transactions

Option T/O- 28 Lakh
Total Sales- 2.74 Crore
Total Purchase- 2.80 Crore
Total Charges- 1 Lakh

So., Total Loss - 7 Lakh

To Claim loss of 7 Lakh For the A.Y. 2025-26
How to Show this entries in P&L

1. Show Sales and Purchases and expenses
or
2. Without Showing Purchase and Sales , Directly Show Loss From F & O Transactions- 6 Lakh
and Other Charges - 1 Lakh

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 October 2025 1. Show sales & purchases with expenses details.

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Javed Memon

Javed Memon (Querist)
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31 October 2025 Sir

Client is Homeopathy Doctor and Gross Receipt is 12 Lakh and Taxable income is 7 Lakh

If we Dont Show F and O Transaction and Loss of their and Only Show Professional Income u/s 44ADA
is there any Significant Problem ?

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 October 2025 Based on AIS reporting by the trading agency, enquiry will be raised from ITD & same will be seen under suspicious angle as the volume is around Rs, 3 Crs.

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Javed Memon

Javed Memon (Querist)
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02 November 2025 Ok
Thanks a lot sir For replies

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 November 2025 You are welcome.

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Javed Memon

Javed Memon (Querist)
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08 November 2025 Respected Sir in this Case Audit is applicable or not ?

asseessee filed his return from A.Y. 2015-16 to A.Y. 2019-20 under 44ADA (ITR 4 ) and
From A.Y. 2020-21 to A.Y. 2024-25 Under Audit ITR3 (44 AB(d) )
in A.Y. 2024-25 there Was also Loss of F and O - 5 Lakh Rs.

So For A.Y. 2025-26 is Audit Mandatory to Claim Loss of F and O ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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09 November 2025 Tax audit not applicable, just books of acc. are required to be maintained. But now you cannot carry forward F&O losses as the date to file ITR u/s. 139(1) has expired.

Javed Memon

Javed Memon (Querist)
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09 November 2025 Assesee is Partner in Partnership Firm (Hospital) where Partnership Firm are under audit and he is received Professional Income subject to TDS under 194J

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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09 November 2025 In that case you have time to claim it by this month end. Good luck...

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