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F&o income

24 November 2022

Can I show zero profit in business income if my turnover from f&o transactions is 57 lacs and loss is 17 lacs and my income exceeds basic threshold limit?

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 24 November 2022

Not advisable.

Even if you cannot carry forward the loss now, but better to declare it in ITR.

If worried about tax audit, its not mandatory in your case.

Vishal Manakshe (258 Points)
Replied 24 November 2022

File the return now and claim the loss in the return. Also, write a letter to the authority as mentioned in 119(2)(b) of the I.T. Act, 1961 for requesting the acceptance and carry forward of the losses

Dev Shewani (18 Points)
Replied 24 November 2022

Last year I have showed f&o income in sec 44AD so I can file itr by showing loss in f&o?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 24 November 2022

You need to express all the details at one go.

With twist in the data, you are mandatorily required to audit the F&O transaction, even if you do not wish to declare the loss.

Or declare the 6% profit on F&O to avoid audit.

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Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 24 November 2022

Calculation of turnover under F&O transaction is somewhat different as compared to regular business. F&O turnover means absolute value of profits/losses for each of the trades. Hope the turnover mentioned in your query is in accordance with this calculation.

By default if you intend to show profit in ITR less than 6% of said turnover (u/s 44AD), you need to get your tax audit done and in that case you need to pay penalty @ 0.5% of the turnover now for delay in filing tax audit report. Even if you get tax audit done, you are not allowed to carry forward your loss if reported in ITR as you are filing return beyond the due date of filing of return u/s 139(1). Irrespective of applicability of tax audit, you would be liable to pay late filing fees as well liable for interest u/s 234A/B/C (if applicable)

Regards,

Manoj

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