F & O transactions - Turnover for Sec. 44AB.
This query is : Resolved
03 February 2009
I have 2 queries:-
(1) For an assessee who is engaged in trading of shares, whether transactions of derivatives (F & O) should be considered for calculating turnover for the purpose of Sec 44AB ?? Take an example:- Turnover from trading in shares is Rs. 35 lakhs, Turnover from F & O transactions is 10 lakhs. Then whether Sec. 44AB is attracted ?
(2) F & O is not delivery based. Therefore only the profit or loss is recorded in the books and not sale / purchase. In that case how to compute turnover of F & O transactions for the purpose of Sec. 44AB ??
(1) For an assessee who is engaged in trading of shares, whether transactions of derivatives (F & O) should be considered for calculating turnover for the purpose of Sec 44AB ?? Take an example:- Turnover from trading in shares is Rs. 35 lakhs, Turnover from F & O transactions is 10 lakhs. Then whether Sec. 44AB is attracted ?
(2) F & O is not delivery based. Therefore only the profit or loss is recorded in the books and not sale / purchase. In that case how to compute turnover of F & O transactions for the purpose of Sec. 44AB ??
03 February 2009
1) Yes.
2) Profit and loss are added together to arrive the turnover of F & O transactions. For example ,profit is Rs 100/- and loss is Rs 250/-,turnover is Rs.350/-for the purpose of 44AB.
2) Profit and loss are added together to arrive the turnover of F & O transactions. For example ,profit is Rs 100/- and loss is Rs 250/-,turnover is Rs.350/-for the purpose of 44AB.
Message likes :
1 times
04 February 2009
It is the net profit or loss from Future and Options which is to be summed up to analyse the limit of Turnover in terms of Section 44AB for the purpose of Tax Audit.
In case of derivative trading-Futures and Option- the difference on which the contract is purchased or sold is important. Although the value of contract is number of contract multiplied with the shares price , yet what is actually given or taken is differential amount in contract. For example if you purchase a future contract for Rs 105 for a share having a lot of 100,you pay nothing at the time of buying a contract, yet at the time of expiry of contract , you are either gainer or loser which is determined whether there is positive or negative difference. So , for the purpose of determining the turnover in case of future and options , for the purpose of 44AB , based on the guidance note of ICAI , following items should be considered to constitute turnover
• The total of positive and negative differences , plus
• Premium received on sale of options is also to be included in turnover ,plus
• In respect of any reverse trades entered, the difference thereon
In case of derivative trading-Futures and Option- the difference on which the contract is purchased or sold is important. Although the value of contract is number of contract multiplied with the shares price , yet what is actually given or taken is differential amount in contract. For example if you purchase a future contract for Rs 105 for a share having a lot of 100,you pay nothing at the time of buying a contract, yet at the time of expiry of contract , you are either gainer or loser which is determined whether there is positive or negative difference. So , for the purpose of determining the turnover in case of future and options , for the purpose of 44AB , based on the guidance note of ICAI , following items should be considered to constitute turnover
• The total of positive and negative differences , plus
• Premium received on sale of options is also to be included in turnover ,plus
• In respect of any reverse trades entered, the difference thereon
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Fixe term employment
- Is any professional CA is here please reply
- Gift Received from nonblood relative
- Section 50-fixed asset-->building ceases to exist
- Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Experts need help
- Putting a heading on received mail
- Reprocessing of rectification order AY 2025-26
- FTS Taxable under 115A
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
