Section 44 ad for f & o transaction

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CA Mehta Ankur N. (Querist)

12 November 2013 Dear Sir,

What would be treated as turn over for F & O Transaction under section 44 AD ?

For eg. we have

Intra Day Loss - Rs.5000

F & O Loss - Rs. 100000

Share Sales - Rs. 275000

Now what would be turn over for section 44AD ?

Thanks for reply in advance.

Nikhil Kaushik

Nikhil Kaushik (Expert)

13 November 2013 For turnover calculation You don't have to look at the net loss or gain.

The turnover shall be:

The total of positive and negative or favorable and unfavorable differences shall be taken as turnover.

Plus Premium received on sale of options is to be included in turnover.

Plus In respect of any reverse trades entered, the difference thereon shall also form part of the turnover.

Plus sale and purchase values of shares.

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CA Mehta Ankur N.

CA Mehta Ankur N. (Querist)

13 November 2013 Thanks Nikhil Kaushik sir.

But For intra day turn over would be loss only na ?

I Mean to say Rs. 5000.

Nikhil Kaushik

Nikhil Kaushik (Expert)

13 November 2013 Yes. What I meant to say is that you have to do total on day to day basis.

For eg: if you made 1000 intra day gain and 6000 intra day then your turnover shall be 7000. However, if you just made 1000 intra day loss for 5 days, the turnover shall be 5000.

So the overall loss will be the same, but turnover can be different.

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CA Mehta Ankur N.

CA Mehta Ankur N. (Querist)

13 November 2013 Nikhil sir,

Is there any way, if we have not done audit of that type of transaction ?

How to do audit of such a person ?

What would be impact of that ?

Thanks sirji..........

Nikhil Kaushik

Nikhil Kaushik (Expert)

13 November 2013 Ankur Bhai,

it doesn't matter whether tax audit applies or not. Income tax department has the right to scrutinize any return. Therefore it is required that all the transactions are reviewed before filing the return.

Possible impact are penalty implications and additional tax levy.

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CA Mehta Ankur N.

CA Mehta Ankur N. (Querist)

13 November 2013 Ok sirji..........

Thanks & Have a nice day to you.

Nikhil Kaushik

Nikhil Kaushik (Expert)

13 November 2013 same to you and welcome

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