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Futures and options - turnover computation

Miss D (student) (114 Points)

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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8 Replies

Charandeep Singh (Manager Accounts) (182 Points)
Replied 12 July 2017

71 lakhs is the answer

Charandeep Singh (Manager Accounts) (182 Points)
Replied 12 July 2017

sorry I misunderstood your question

Poltu Ghosh (Job) (1865 Points)
Replied 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.

Poltu Ghosh (Job) (1865 Points)
Replied 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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CA Keyur Mehta (Chartered Accountant) (27 Points)
Replied 12 July 2017

unless you get the accounts audited u/s44 ad, you will get defective return notice

Poltu Ghosh (Job) (1865 Points)
Replied 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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