F&o- loss- tax audit

HAI

IF A PERSON HAS F&O OPERATIONS RESULTS IN LOSS AND ALSO VERY FEW TRANSACTIONS HE DID.THEN WHAT IS THE TAXABILITY  AND ALSO WHETHER TAX AUDIT IS APPLICABLE FOR THAT PERSON ?-(BOOKS MAINTAINED)

*SOME CA'S GAVE AN OPINION THAT TAX IS APPLICABLE.

URGENT

Replies (6)

1. Asessed under head 'PGBP'; its non-speculative nature.

2. Loss can be set off with other heads of income, except 'salary'

3. If total income exceed BEL, tax audit applicable.

4. If turnover is not high, better to declare 6% profit margin, to avoid tax audit. 

SIR TQ FOR REPLY,

ALREADY HE DID A MISTAKE BY FILING ITR3 BY SELECTING NO TAX AUDIT OPTION.NOW CAN HE REVISE A RETURN AND CAN FILE ITR4?.AND ALSO PLS TELL FOR 6% CALICULATION HOW THE TURNOVER TO BE CALICULATED?

1. Non-speculative transactions (Futures and options)

  • The total of favorable and unfavorable differences shall be taken as turnover
  • Premium received on sale of options is also to be included in turnover
  • In respect of any reverse trades entered, the difference thereon should also form part of the turnover.

More over check the broker's consolidated statement for turnover amount.

2. Yes, you can revise with 6% of the turnover as presumptive income u/s. 44AD.

can you please explain the meaning of favourable and unfavorable difference?

Favourable means where assessee gained, and unfavourable means wherein he made loss, in any contract.

TQ VERY MUCH SIR.

I UNDERSTOOD CLEARLY

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