F & O TURNOVER CALCULATION FOR TAX AUDIT

This query is : Resolved

naresh (Querist)
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07 July 2025 As Per ICAI GN the derivative turnover is
(i) The total of favourable and unfavourable differences in case of squared off transactions shall be taken as turnover.
(ii)Premium received on sale of options is also to be included in turnover. However, where the premium received is included for determining net profit for transactions, then such net profit should not be separately included.

Please confirm whether we have to take the premium on sale of options in turnover calculation and if the the transaction in profit then leave profit part as it is already in sale premium. for example : one buy 100 qty @ 100 and sale it as 120/-. then the profit is 2000/-.,
Now please clarify what will be the turnover. Either the turnover should be 2000/-( only profit) or sale premium value of 12000/-. and we ignore profit of 2000/- to remove double counting. ( which is complaint with the GN)

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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12 August 2025 Since premium received on sale of options is ₹12,000, and
Profit of ₹2,000 is already embedded in this premium,
You include the sale premium of ₹12,000 in the turnover figure and do NOT separately include the ₹2,000 profit.
So, turnover = ₹12,000 (premium received) only.
Why?
Including both premium and profit separately would result in double counting because profit is derived from the premium.
The ICAI GN explicitly says to include premium received, and if premium is part of net profit computation, do not add profit again.

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