Itr form to use

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Ashok (Querist)
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26 July 2011 Hi,

I am a salaried professional (have received Form16 from company). I have to show F&O loss. Please let me know which ITR form and in which section should it be filled?

Thanks
Ashok

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 July 2011 ITR 4 is the appropriate form. Loss from derivatives (F&O) is business loss and to be offered under the head "income from business or profession".

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Ashok

Ashok (Querist)
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26 July 2011 Thank you for the quick response. Couple more related questions.
1) where do I show the HRA exemption(as it was not considered for form16) in ITR4?
2) If my turnover is more than limit(40Lacs), do I need to get audited? Also, any idea on the auditing charges as this is my first time.
3) If I am getting audited, do I have time till Sep-30 to file the returns ? Can I carry forward losses even if I file returns after July-31 in such a case.

Thanks for your help!

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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27 July 2011 1) where do I show the HRA exemption(as it was not considered for form16) in ITR4?

Reply-

You can show HRA by under allowances exempt u/s 10.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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27 July 2011 2) If my turnover is more than limit(40Lacs), do I need to get audited? Also, any idea on the auditing charges as this is my first time.

Reply- Turnover in case of F&O means totals of profits and losses in respect of each transaction in F&O forgetting the + or - sign.

Tax audit is applicable when such turnover exceeds 60.00 lac and in that case you may file your return up to 30.09.2011 for c/fd the business loss.

However, in non-audit case you have to file return on or before 31.07.2011.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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27 July 2011 HRA exemption may be shown in schedule S, clause 2 of ITR-4.

Ashok

Ashok (Querist)
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27 July 2011 thanks again.One last question - in which section, do I show the turnover, profit/loss for F&O in ITR-4?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2024 In ITR-4, which is used by individuals and Hindu Undivided Families (HUFs) for filing their returns of income under the presumptive taxation scheme or for reporting income from business or profession, you need to correctly categorize and report your income from Futures and Options (F&O) trading.

**Here's how to report turnover, profit, and loss from F&O trading in ITR-4:**

### 1. **Turnover, Profit/Loss Reporting**

#### **Income from Business or Profession**
1. **Turnover**:
- **Section**: **Schedule BP** (Business or Profession).
- **Particulars**:
- Enter your **turnover** in **Part A - Profit and Loss Account**.
- **Turnover** should include the total of all trades executed during the financial year.
- Since F&O trading is considered a business activity, you report it under "Turnover" as part of the business income.

2. **Profit/Loss**:
- **Section**: **Schedule BP** (Business or Profession).
- **Particulars**:
- Report your **Net Profit** or **Net Loss** in the **Profit & Loss Account** section.
- For F&O, the profit or loss is calculated as per the normal accounting principles and shown as either **Profit** or **Loss**.

### 2. **Schedule Details**

#### **Part A - Profit and Loss Account**
- **Turnover**: Enter the total turnover from F&O trading.
- **Net Profit/Loss**: Enter the net profit or loss from F&O trading.

#### **Part A - Balance Sheet**
- While the primary focus is on the Profit and Loss Account, you should ensure that your balance sheet also reflects any assets and liabilities related to F&O trading, such as outstanding positions.

### 3. **Additional Considerations**

- **Income Classification**: F&O trading income is categorized as business income, not capital gains. Therefore, it should be reported under the business income section rather than the capital gains section.
- **Audit Requirement**: If your turnover exceeds the threshold limit specified under tax audit requirements (typically ₹1 crore), you must get your accounts audited and file a tax audit report (Form 3CD).

### Summary of Reporting

- **Turnover**: Report in **Schedule BP** under **Part A - Profit and Loss Account**.
- **Profit/Loss**: Report in the same schedule (Schedule BP) under the **Profit and Loss Account** section.

Ensure that all figures are accurately reported and that your accounting practices align with the tax laws. If there is any ambiguity or complexity, consider consulting a tax professional or accountant for precise guidance.

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