Futures and options - turnover computation

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student
47 Points Posted on 12 July 2017

A person does Futures and Options trading. Hence, he needs to show it as business income. Lets say,  he makes profit of Rs. 27 lakhs in futures and loss of Rs. 44 lakhs in options. In this case, his net loss is Rs. 17 lakhs ( 44-27).

Turnover for F&O = Rs. 71 lakhs (44+27) being the absolute sum.

While filing ITR, how should he file to carry forward this loss of Rs. 44 lakhs?

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On 12 July 2017 at 20:45 Report
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Manager Accounts
115 Points Posted on 12 July 2017
71 lakhs is the answer
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On 12 July 2017 at 21:42
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Manager Accounts
115 Points Posted on 12 July 2017
sorry I misunderstood your question
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On 12 July 2017 at 21:42
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Job
1103 Points Posted on 12 July 2017
As per your question net loss is 44 lakh and net profit is Rs 27 lakh. So loss to be carried forward is Rs. 17 lakh only , not Rs. 44 lakh.
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On 12 July 2017 at 22:14
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Job
1103 Points Posted on 12 July 2017
Regarding its disclosure in ITR, put the profit figure of Rs. 27 lakh on the Income side and loss of Rs. 44 lakh on the expenditure side. The net result of Rs. 17 lakh will be loss and will be allowed to be carried forward accordingly. Please note the Turnover as computed by you is for determining applicability of tax audit only and not for reporting in ITR
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On 12 July 2017 at 22:17
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Chartered Accountant
27 Points Posted on 12 July 2017
unless you get the accounts audited u/s44 ad, you will get defective return notice
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On 12 July 2017 at 23:14
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Job
1103 Points Posted on 12 July 2017
Tax audit is required if presumptive income scheme without maintaining books of accounts is followed or say if ITR 4 is filed. If ITR 3 is filed with full pl and balance sheet details no need for tax audit
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On 12 July 2017 at 23:17
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student
47 Points Posted on 13 July 2017

Thanks a lot. I understood now.

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On 13 July 2017 at 11:26
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student
47 Points Posted on 13 July 2017

I think he is not liable for tax audit as he has incurred a loss and also his total income is below basic exemption. 

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On 13 July 2017 at 11:27

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