Future and Option Turnover

• Balance Sheet: Show profit of ₹1.01 lakh under P&L.

• ITR: Profit ₹1.01 lakh taxable. Turnover can be gross (₹11.47 crore) if ITR asks, otherwise leave blank.

• Audit (Form 3CD): Turnover = Sale + Purchase = ₹11.47 crore.

For F&O, turnover for tax-audit purposes is not the sales figure of ₹5.74 crore. It is generally computed by aggregating the absolute amounts of favourable and unfavourable differences on each transaction; options turnover may also include the premium received, subject to the applicable computation method. Therefore, the stated sales and purchase figures alone do not establish your tax turnover, and the ₹1.01 lakh profit is not itself turnover.

In the balance sheet, do not show ₹5.74 crore as turnover: report the year’s net profit in the profit and loss account, with relevant year-end assets and liabilities in the balance sheet. In the ITR, disclose F&O income as business income using the applicable business schedule and turnover figures. Recompute turnover from your trade-wise derivatives statements before deciding whether tax audit applies; the ₹5.74 crore sales figure is not the test.

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