Futures & options

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Suraj (Querist)
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07 April 2019 Dear All,

Mr. A is having loss of Rs. 90,000/- from Futures & options during FY 2018-19. As per CA institute's guidelines, turnover from F&O activities come to Rs. 19 lakhs. He doesn't want to opt for tax audit. Can he declare his profit from F&O @6% of turnover under presumption taxation since F&O transactions are all computer based instead of 8%??

Kindly Guide.
Regards,
Suraj

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 April 2019 The loss from F&O transaction can be shown as such at Rs 90000/- as a business loss and if the assessee's total income remains below Rs 2.50 lacs he is not required to get his accounts audited. It is not advisable to show the profit on presumptive basis.

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Suraj

Suraj (Querist)
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07 April 2019 Dear Sir,

Does the applicability of tax audit depend on the criteria of turnover limit of Rs. 1 Cr only?
Here Mr. A is having professional income for which he prepares Income & Expenditure account. His Gross Professional income is Rs. 9.5 lakhs and net income comes to Rs. 6.5 lakhs. Besides this, he does F&O where his turnover comes to Rs. 19 lakhs with loss from F&O is Rs. 90000/- . His net taxable income considering other income and investments comes to Rs. 7.00 lakhs.

My questions are:
1) Based on above, whether tax audit applicable is applicable for him?
2) Can he set off loss of Rs. 90000/- from F&O business from his net professional income of Rs. 6.5 lakhs?

Regards,
Suraj

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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10 April 2019 1. Tax Audit is Not Applicable.
2. FO loss can be set off against his net professional income.

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Suraj

Suraj (Querist)
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23 July 2019 Sir,
NP % from Professional income was 64%. When combined P&L BS with F&O business is prepared then NP% goes below 50%. I am using Winman software. It clubs Professional income and F&O sale figures and considers this turnover and then shows tax audit is applicable.
1) F&O sale to be shown as sale of goods or sale of services or Other Operative Income.?
2) Whether to show F&O loss as speculation loss?

Please guide sir.

Regards,
Suraj

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