STCL or Business loss
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 July 2010
Dear Sir,
i have derivative loss for the cyrrebt AY, should i show it in STCL or Business loss.
Should i need to get tax audit done if the volume is little higher though the source of income is salaried...
Regards
Ashok
i have derivative loss for the cyrrebt AY, should i show it in STCL or Business loss.
Should i need to get tax audit done if the volume is little higher though the source of income is salaried...
Regards
Ashok
01 August 2010
business loss.
For tax audit turnover limit is 40 lacs.
THE TURNOVER OR GROSS RECEIPTS IN RESPECT OF TRANSACTION IN SHARES, SECURITIES AND DERIVATIVES MAY BE DETERMINED IN THE FOLLOWING MANNER.
(a) SPECULATIVE TRANSACTION: A speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scripts. Thus, in a speculative transaction, the contract for sale or purchase which is entered into is not completed by giving or receiving delivery so as to result in the sale as per value of contract note. The contract is settled otherwise and squared up by paying out the difference which may be positive or negative. As such, in such transaction the difference amount is 'turnover'. In the case of an assessee doing speculative transactions there can be both positive and negative difference arising by settlement of various such contracts during the year. Each transaction resulting into whether a positive or negative difference is an independent transaction. Further, amount paid on amount of negative difference paid is not related to the amount received on account of positive difference. In such transactions though the contract notes are issued for full value of the purchased or sold asset the entries in the books of account are made only for the differences. Accordingly, the aggregate of both positive and negative differences is to be considered as the turnover of such transaction for determining the liability to audit vide section 44 AB.
(b) Derivatives, futures and options: Such transactions are completed without the delivery of shares or securities. These are also squared up by payment of differences. The contract notes are issued for the full value of the asset purchased or sole but entries in the books of account are made only for the differences. The transactions may be squared up any time on or before the striking date. The buyer of the option pays the premia. The turnover in such types of transactions is to be determined as follows:
i. The total of favourable and unfavourable differences shall be taken as turnover.
ii. Premium received on sale of options is also to be included in turnover.
iii. In respect of any reverse trades entered, the difference thereon, should also from part of the turnover.
For tax audit turnover limit is 40 lacs.
THE TURNOVER OR GROSS RECEIPTS IN RESPECT OF TRANSACTION IN SHARES, SECURITIES AND DERIVATIVES MAY BE DETERMINED IN THE FOLLOWING MANNER.
(a) SPECULATIVE TRANSACTION: A speculative transaction means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scripts. Thus, in a speculative transaction, the contract for sale or purchase which is entered into is not completed by giving or receiving delivery so as to result in the sale as per value of contract note. The contract is settled otherwise and squared up by paying out the difference which may be positive or negative. As such, in such transaction the difference amount is 'turnover'. In the case of an assessee doing speculative transactions there can be both positive and negative difference arising by settlement of various such contracts during the year. Each transaction resulting into whether a positive or negative difference is an independent transaction. Further, amount paid on amount of negative difference paid is not related to the amount received on account of positive difference. In such transactions though the contract notes are issued for full value of the purchased or sold asset the entries in the books of account are made only for the differences. Accordingly, the aggregate of both positive and negative differences is to be considered as the turnover of such transaction for determining the liability to audit vide section 44 AB.
(b) Derivatives, futures and options: Such transactions are completed without the delivery of shares or securities. These are also squared up by payment of differences. The contract notes are issued for the full value of the asset purchased or sole but entries in the books of account are made only for the differences. The transactions may be squared up any time on or before the striking date. The buyer of the option pays the premia. The turnover in such types of transactions is to be determined as follows:
i. The total of favourable and unfavourable differences shall be taken as turnover.
ii. Premium received on sale of options is also to be included in turnover.
iii. In respect of any reverse trades entered, the difference thereon, should also from part of the turnover.
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