F&O.........

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This discussion clarifies two primary methods for F&O taxation: presumptive taxation and showing your books. Presumptive taxation involves calculating turnover based on absolute profit/loss for futures, and a mix of absolute loss and sale value for options. A key point of confusion is the exact turnover calculation for profitable options trades. Alternatively, showing your books allows for carrying forward losses, though it requires careful reconciliation with presumptive tax requirements.

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Guest (Querist)

13 August 2023 As F&O is normal business, there are 2 options. One is presumptive taxation and the other one is to show books.

PRESUMPTIVE TAXATION:

FUTURES:
Absolute profit and loss is the turnover for Futures trading i.e let's say we earned profit of Rs. 100 in one trading and suffered loss of Rs. 100 in another one. So, turnover will be Rs. 200

OPTIONS:
For loss transactions in Options, Turnover = Absolute loss + Sale Value. So, turnover will be buy value.

FIRST DIFFICULTY comes with calculation of turnover for profit transactions in Options. Trading platforms like Groww, Angel One etc.. suggest Turnover = Profit + Sale Value. But Tax Guru suggests Turnover = Profit value. So, which is the correct one?.

SHOWING BOOKS:
Even if I have suffered losses, I have to show a minimum of 6 percent profit under presumptive taxation. To carry forward losses, there is no other option other than to show books. But how is it possible practically? To show such a huge turnover as discussed in presumptive taxation and to arrive at a negative figure. CORRECT ME IF I AM WRONG.