Determining the Turnover in case of Futures and Options transactions.

The meaning of turnover for in case of transactions in Futures and Options of shares is not defined under the I T Act.

In case of derivative trading-Futures and Option- the difference on which the contract is purchased or sold is important. Although the value of contract is number of contract multiplied with the shares price , yet what is actually given or taken is differential amount in contract.

For the purpose of determining the turnover in case of future and options, based on the guidance note of ICAI , following items should be considered to constitute turnover:-

•  The total of positive and negative differences , plus
• Premium received on sale of options is also to be included in turnover ,plus
• In respect of any reverse trades entered, the difference thereon.        But not the total value of contract.

Refer::  2014/11/Guidance-Note

Thank you sir for your valuable reply.

As stated in your above article the second bullet points read as follows:

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

If seen practically all my Transactions in F&O are on premium basis. for eg: If i have short 20 Nifty options @ 100rs per contract. This transaction is nothing but my premium, so as mentioned in your article 20×100= 2000 will be added to my turnover.

Kindly help me in resolving this issue. And explain me the meaning of the second mentioned bullet.

Thanks

Yes, correct (till it gets expired); But when you sell off (reverse trade) the contract at some premium.... in that case the positive difference amount is also added over the premium to calculate turnover.

Refer:: turnover-balance-sheet-and-pl

 

Thank you Sir for your valuable reply.

What will be my Turnover which need to be reported in Balance Sheet as per Companies Act, If I have Loss of Rs.100/- from F&O and sale of Equity Shares is Rs.200/-.

 

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