Accounts for fno trading

Tax queries 937 views 17 replies

Till last year, I have filed salaried return. This year I have FnO profit as well. So filing ITR 3. Now my queries are:

1. Do I need to maintain books of accounts (This year FnO profit above 2.5 lacs. However, last year no transactions).

2. If at all I have to maintain books of accounts, do I need to take into account my personal assets as well. There is a separate bank a/c for FnO transaction. So can I prepare considering only that statement.

Replies (17)

Kindly reply on the above, incase someone has done that earlier..

File ITR 4 & declare the F&O transactions u/s. 44AD (provided turnover below 2 Crs, & 6% deemed profit margin).  No books required to be maintained.

Is sec 44AD allowed for FnO transactions? If we follow that profit would be much lower than actual profit. Read at lot of places that it is not allowed for FnO

It is eligible business for F&O transactions; but once opted....... you have to stick to it for 5 years, to avoid tax audit & books maintainance.

Ok Thanks. 

So in case we want to opt out next year, as a penalty we cant choose the scheme again for 5 yrs. Is there anything else in this.

Also, in case i decide to file return under normal scheme:

1. Do I need to maintain books of accounts (This year FnO profit above 2.5 lacs. However, last year no transactions).

2. If at all I have to maintain books of accounts, do I need to take into account my personal assets as well. There is a separate bank a/c for FnO transaction. So can I prepare considering only that statement.
 

What is the turnover of F&O? As per broker's statement?

Turnover in accordance with IT rules for FnO transactions is 52 lacs for this year. Last year no such transaction.

If you declare 6 % i.e. 3.12L as profits from F&O, no audit mandatory u/s. 44AD.....

Otherwise audit mandatory.....

If you declare 6 % i.e. 3.12L as profits from F&O, no audit mandatory u/s. 44AD.....

Otherwise audit mandatory.....

But audit is required only if turnover is above 1 Cr.

The reason we dont want to opt for 44AD is continuity required for 5 years. If we opt for it and lets say next year there is a loss or lower profit, at that time we will have get the accounts audited.

In your case, the audit u/s. 44AB is mandatory, when you do not declare 6% profits over F&O.

This is the first year and we are not opting for 44AD. In that case regular provisions and limits should apply which is 1 Cr and there is no fixed percentage of profit to be declared in such case.

That is the interpretation arrived at after the amendment in sec. 44AD vide finance act, 2016; which is still debatable; and I partially agree to it until clarification obtained from CBDT.


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