Reporting f&o sale amount in other operating revenue of trading a/c

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This discussion clarifies how to report Futures & Options (F&O) sale amounts and turnover in financial accounts. It explains that the absolute sale and purchase values of F&O trades should not be reported directly. Instead, the turnover should be calculated as the sum of profits and losses. The advice given is to report this turnover, potentially under Section 44AD if profitable, or to file financial statements if there are losses, ensuring losses can be carried forward.

Nikhil Sharma

Nikhil Sharma (Querist)

23 July 2024 Dear Experts,
F&o sale amount is above 10 cr but absolutely turnover is below 10 cr.

Is it correct to report sale amount of f&o in other operating revenue of trading A/c.

Also let me know where to report absolute turnover of f&o in trading or p&l A/c

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

24 July 2024 F&O turnover can be calculated as the total income from F&O trading, which takes into account all the sum of profits and losses.

Nikhil Sharma

Nikhil Sharma (Querist)

24 July 2024 Respected sir, I knew the absolute calculation of f&o turnover taking sum of profit & loss. But my query was, is it correct to reporting total sale value of f&o in 'other operating revenue' of trading A/c and total purchase value of f&o in serial 46 of p&l under 'other expenses'
However there is no column to report absolute turnover in trading & p&l. ??

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

24 July 2024 Purchase value and sale value of f&o not to be reported.
Report turnover as sum of profit and loss.
Report 6% turnover as profit under 44AD.

Nikhil Sharma

Nikhil Sharma (Querist)

25 July 2024 Sir, my case is of f&o loss, if we report under 44AD, we cannot carry forward loss.
Hence we have to file financial, and in case of financial there is No separate column to report absolute turnover taking all sum of profit & loss. ??

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

25 July 2024 Then report loss and carry over.

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