Turnover calculation for intra day share trading

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Suraj (Querist)
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06 September 2021 Dear All,

I want to know about intra day share trading i.e. speculation business income or loss.

1) How to show speculation business income or loss in ITR?
2) There are two options. Whether regular books of account are maintained or not? Now all reports are available in computerised form. Which option to select?
3) How to calculate Turnover for speculation ?

Kindly guide.

Regards,
Suraj

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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06 September 2021 1. Yes, you can declare the income with regular books of account maintained in ITR3; unless you wish to declare it under presumptive assessment.

2. Turnover in the case of Intraday Trading is Absolute Turnover,

Absolute Turnover is the Sum total of absolute profits minus losses made on daily transactions.

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Suraj

Suraj (Querist)
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06 September 2021 Rambhia Sir, in present case sales value is 2,45,81,652/- and purchase cost is 243,45,748/-, the profit comes to Rs.235,904/- , so the absolute turnover will be Rs. 235,904/-..... am I right?
and books are not maintained, the turnover and gross profits would be Rs. 235,904/-... right? Kindly guide.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 September 2021 No. That is not correct method...
For all speculative transactions, aggregate or absolute sum of both positive and negative differences from trades is to be considered as a turnover.
So if you buy 100 shares of Reliance at 800 in the morning and sell at 820 by afternoon, you make a profit or positive difference of Rs 2000, this Rs.2000 can be considered as turnover for this trade.
But if you had sell at 780 then also turnover would have been same i.e absolute of (-2000) i.e. 2000/- while there would have been loss of Rs. 2000/-
Now, suppose you had done both these transactions (may be on different date). Your turn over would have been Rs. 4000/- while profit/loss NIL.
So consider each transaction separately, and go on adding ABSOLUTE value to get the Turnover.

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CMA Poornima Madhava

CMA Poornima Madhava (Expert)
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07 September 2021 Here is an example on absolute turnover. Hope this helps you:
Mr.X buys 1000 shares of ABC Ltd at Rs.100. He sells the shares at the end of the day at Rs.110.
Profit = Rs.10 * 1000 shares = Rs. 10,000/-
On the next day, he buys 200 shares of PQR Ltd at Rs.300. At the end of the day, he sells the shares at Rs.280.
Loss = Rs. 20 * 200 shares = Rs. 4,000/-
Absolute Turnover = Rs. 10,000+ Rs. 4,000 =Rs.14,000/-

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Suraj

Suraj (Querist)
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07 September 2021 Thank you so much Rambhia Sir and Poornima Madam.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 September 2021 Most Welcome ...

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