Taxation and fo turnover

ITR Filing 450 views 2 replies

Subramanian

CMA

25 Points Posted on 02 August 2015

I have gone through the various queries and replies and I still confused. I have also contacted some Chartered Accountants, but at the end of the I am still confused.

Taking my case in the FO segment I have made total loss of Rs 4.9 lacs. But if I calculate my TO I have add positive and negative ignoring the sign. So my turnover is 3,80+(-8.7*-1)= Rs12.5 lacs.

If show my turnover as Rs 12,5 Lacs how can I show a loss of Rs 4.9 Lacs?

If I show Rs 12.5 Lacs as TO, how will show a loss of 4.9 Lacs. When my net receipts from FO is negative figure whether the ICAI is right in calculating the turnover in the above fashion, May all experts are interpreting the guidance notes in a wrong manner? I am not sure. If the Institute Guidance note is correct what is rule or law behind that,

Can any body guide me. If any body can give their mobile I can talk. My mobile is 9176309550 and my email is subra51 @ yahoo.com

Replies (2)

Rajagopalakrishnan R

PARTNER

1434 Points Posted on 02 August 2015

Sir I think you are confusing between the determination of turnover for tax audit applicability and the actual purchase andsale value.

To check whether you are liable to be audited under sec 44AB ( i.e crossing 1 crore of TO) the following should be reckoned

(i) The total of favourable and unfavourable differences shall be taken as turnover.

(ii) Premium received on sale of options is also to be included in turnover.

(iii) In respect of any reverse trades entered, the difference thereon, should also form part of the turnover.

In the example given you have correctly calculated the turnover. and hence you do not qualify for the Compulsory audit. However, since you are showing a loss, you are required to be compulsorily auditedunder section 44AD read with 44AB.

Now the question of how to arrive at the loss. You simplydraw up a F & O trading account based on the Sauda summary given by your broker. Show all your expenses like trading commission etc and arrive at net profit/loss.

Subramanian

CMA

25 Points Posted on 02 August 2015

Dear Mr. Rajagoplakrishnan

Thanks for your reply. I have understood. But why ICAI guidenace Note arrives at the turnover in this manner? For me it looks illogical.

I request you to explain what is Sauda summary. I am with Sharekhan. I can get the F&O report for the whole year, which shows a loss of Rs478000. I can deduct other expenses and arrive at a loss. So I have to give this to the auditor for getting Audit Report? Am I correct? Once I get the Audited PL account, how will fill up ITR4. ITR4 starts with receipts. In receipts ITR4 will not accept negative figure. I am not much familiar with Income Tax. Will you be able to help me in this regard. You can PM in my mobile 9176309550 or subra51 @ yahoo.com. I in Chennai

S S Subramanian