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Method of account

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Dilip Datta Choudhury

Tax Practioner/Consultant

84 Points Posted on 10 April 2021

Hindu Undivided Family(HUF) have only source of income from share trading which include short term, long term and day trading on equity share. Total turnover around (+)/(-) Rs.1 crore. I draw accounts showing purchase & sale and other expenditure on mercantile basis and duly audited. Is the procedure is the correct procedure or any other method to be followed?

Please advise.

Replies (3)

Quick Summary

This discussion addresses the correct accounting method for a Hindu Undivided Family (HUF) whose sole income source is share trading, with a turnover of approximately Rs. 1 crore. The current method uses the mercantile basis for purchases, sales, and expenses, with accounts duly audited. The consensus is that this mercantile basis is the correct procedure, especially given the speculative nature of day trading, which necessitates compulsory maintenance of books of accounts.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 10 April 2021

In case of speculative business, books of accounts should be maintained compulsorily.

Expense, Income and other related expenses and income of shares related should be shown in accounts