Treatment Under F & O of Different Items

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This query is : Resolved

Harminder Singh (Querist)

15 January 2010 1.In which group Mark To Market should be included intially?
2.On settlement Shall Mark To Market difference be transferred to P & L a/c?
3. If yes can I show it as speculation income or speculation loss in profit & loss a/c?

Aditya Maheshwari

Aditya Maheshwari (Expert)

15 January 2010 1. It should be booked under the head "Mark-to-Market Margin A/c"
2. Yes
3. It will be non speculation profit or loss and not speculation

Aditya Maheshwari

Aditya Maheshwari (Expert)

15 January 2010 And also for further assisstance you can download Guidance Note on Accounting for Equity Index and Equity Stock Futures and Options from this link https://www.caclubindia.com/share_files/files_display.asp?files_id=8370

Harminder Singh

Harminder Singh (Querist)

16 January 2010 Sir, but i want to know about in which group, shall it be included in Current Assets or in any other group?

Secondly, please explain briefly, why it shall not be treated as speculation, though itis trading of shares?

Aditya Maheshwari

Aditya Maheshwari (Expert)

16 January 2010 It will go under the head loans & advances or under current liabilities.

As per Income Tax Act 1961 section 43(5) deravatives trading in shares is not treated as speculation trading

Harminder Singh

Harminder Singh (Querist)

16 January 2010 Thank you sir for your guidance

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