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Presumptive taxation - f&o trading

Suraj (735 Points)

27 January 2019

Dear Sir / Madam,

If there is loss from Futures & Options, then tax audit is required to be carried out or else one can declare profit under Presumptive taxation.

Can we declare it @ 6% (instead of 8) of total turnover under F&O since all transactions are digital?

Kindly revert.

Thanks,

Suraj

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 27 January 2019

Yes, one can declare profit under Presumptive taxation.

Can we declare it @ 6% (instead of 8) of total turnover under F&O since all transactions are digital?
YES.

4 Like

Girish Jain (150 Points)
Replied 27 January 2019

Suraj, Tax liability becomes huge when you declare tax @ 6% on Turnover as per Guidance Note of 44AB. It is wise to do Tax audit under 44AB. Moreover, if you show presumptive Tax, you are forced to be in same section for next 5 years. And also you cannot carry forward the Non Speculative loss on futures and options. Fur further need and help, drop mail at Girishjain2105 @ gmail.com.

1 Like

Suraj (735 Points)
Replied 29 January 2019

Thank you Dhirajlalji.

For Option trading, how do we maintain accounts? as theoretically we know how to calculate turnover. Its sum of favourable/unfavourable difference and premium received from sale of options, How to show Turnover in P&L a/c ? Actually I want some accounting entries that to be passed in Tally covering option trading.

What is exactly meant by Premium received on sale of options as per ICAI guidance note? I mean Do we need to consider only that premium where the Option is sold first??

Please guide.

Regards,

Suraj

Suraj (735 Points)
Replied 29 January 2019

Thank you Girishji.

What is exactly meant by Premium received on sale of options as per ICAI guidance note? I mean Do we need to consider only that premium where the Option is sold first??

Please guide.

Regards,

Suraj