ITR (Income Tax Return) Form 3 is applicable for an individual or a Hindu Undivided Family who has income under the head “Profits or gains of business or profession.”
1.1 The income/loss arising from trading in F&O Transactions is treated as business income. A person dealing in Future & Option or Intraday transactions is required to file ITR 3. This form allows reporting all other income such as Income from Salary, Capital Gain, Income from other sources, etc., apart from income earned through F&O business.
1.2 The article covers a step-by-step procedure to file ITR 3 in case of losses in F&O (Future & Options) and intraday business.
2. ILLUSTRATION: Mr. Arindam is a salaried employee who also invests in the share market and is engaged in intraday and Future & Options trading. The income details other than F&O and Intraday transactions are as follows:
| Sl. | Particulars | Amount(Rs.) |
| (a) | Short-Term Capital Loss | (65,000) |
| (b) | Long-Term Capital Gain | 3,70,000 |
| (c) | Income From Bank Interest | 25,000 |
| (d) | Income from Salary | 4,80,000 |
3. The intraday and F&O transactions details extracted from the demat account are as indicated below:-
| INTRADAY TRANSACTION STATEMENT 2022-23 | ||||||||||
| Sl | Qty | Buy Date | Buy Price | Buy Value | Sell Date | Sell Price | Sell Value | Net Realized P&L | Abs olute Turn over | Ex penses |
| (a) | (b) | (c ) | (d) | (e)=b*d | (f) | (g) | (h)=b*g | (i)=h-e | (j) | (k) |
| 1 | 400 | 02-Feb-3708 | 119.33 | 47733 | 02-Jan-2023 | 118.79 | 47514.12 | -218.88 | 218.88 | 40.83 |
| 2 | 200 | 02-Feb-2023 | 339.62 | 6792 3.44 | 02-Feb-2023 | 347.83 | 69566.94 | 1643.5 | 1643.5 | 72.15 |
| 3 | 100 | 21-Mar-2023 | 519.06 | 5190 5.97 | 21-Mar-2023 | 521.04 | 52104.47 | 198.5 | 198.5 | 42.96 |
| 4 | 200 | 01-Feb-2023 | 173.07 | 3461 4.24 | 01-Feb-2023 | 171.64 | 34328.14 | -286.1 | 286.1 | 36.11 |
| 5 | 10 | 09-Mar-2023 | 666.57 | 6665.65 | 09-Mar-2023 | 664.49 | 6644.85 | -20.8 | 20.8 | 10.3 |
| 6 | 10 | 13-Jan-2023 | 1376.16 | 13761.58 | 13-Jan-2023 | 1386.4 | 13863.98 | 102.4 | 102.4 | 22.63 |
| 7 | 11 | 03-Feb-2023 | 1341.71 | 14758.77 | 03-Feb-2023 | 1337.72 | 14714.91 | -43.86 | 43.86 | 22.31 |
| 8 | 10 | 02-Feb-2023 | 2074.47 | 20744.7 | 02-Feb-2023 | 2035.6 | 20356.03 | -388.67 | 388.67 | 31.56 |
| 9 | 25 | 03-Jan-2023 | 159.3 | 3982.48 | 03-Jan-2023 | 158.12 | 3953.08 | -29.41 | 29.41 | 6.51 |
| 10 | 400 | 02-Jan-2023 | 154.19 | 61676 | 02-Jan-2023 | 154.98 | 61992.12 | 316.12 | 316.12 | 62.02 |
| 11 | “ | “ | “ | “ | “ | “ | “ | “ | “ | “ |
| 12 | “ | “ | “ | “ | “ | “ | “ | “ | “ | “ |
| 5621 307.3 | 5620 566.5 | -740.95 | 72027 | 6112.34 | ||||||
3.1 How to Calculate Absolute Turnover:
(a) Obtain the absolute value from column (i). The absolute value means the real number without regard to its (+) or (-) sign.
(b) The absolute value can be calculated using the ABS formula in Excel with the following steps:
(i) Step 1: Select the cell where you want to calculate the absolute value. Click on the cell where you want to calculate the absolute value.
(ii) Step 2: Type the formula. Type the formula =ABS() into the cell.
(iii) Step 3: Enter the number or cell reference.
(iv) Step 4: Press Enter.
(c) The sum of column (i) is the absolute turnover.
3.2 The same method of calculating absolute turnover is applicable for Future & Option transactions. Prior to AY 2022-23, for calculating option turnover, the premium received (sale value) was added back to the absolute P&L number and then posted as turnover, which has now been removed by the ICAI. It has been clarified by ICAI vide Tax Guidance Note 2022 that where the premium received is included for determining net profit for transactions, the same should not be separately included.
3.3 The tax department is yet to amend the IT Act to include this condition.
3.4 In the absence of any guidance from the IT department, everyone relies on the guidance given by ICAI for ITR filing.
| FUTURE TRANSACTIONS – 2022-23 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Contract | Qty | Entry Date | Entry Price | Entry Value | Exit Date | Exit Price | Exit Value | Net Realized P&L | Expenses |
| FUTIDX _ NIFTY | 50 | 29-Mar-2023 | 17050.6 | 8525 27.44 | 29-Mar-2023 | 169 92.99 | 8496 49.69 | -2877.76 | 167.76 |
| FUTIDX _ NIFTY | 50 | 20-Mar-2023 | 16947.2 | 8473 60.63 | 21-Mar-2023 | 1707 1.03 | 853 551.69 | 6191.04 | 168.12 |
| FUTIDX _ NIFTY | 100 | 20-Mar-2023 | 16947.2 | 1694 721.25 | 20-Mar-2023 | 16915.1 | 1691 510.25 | -3210.95 | 334.28 |
| FUTIDX _ NIFTY | 25 | 23-Mar-2023 | 40140.1 | 1003 502.94 | 24-Mar-2023 | 397 94.59 | 9948 64.75 | -8638.16 | 191.91 |
| TOTAL | 4398 112.25 | 438 9576.38 | -8535.83 | 862.07 | |||||
–
| OPTION TRANSACTION DETAILS – 2022-23 | |||||||||
| Contract | Qty | Entry Date | Entry Price | Entry Value | Exit Date | Exit Price | Exit Value | Net Re alized P&L | Exp |
| OPTIDX_ BANK NIFTY_23-Mar-2023_39 700.0_CE | 25 | 16-Mar-2023 | 260.45 | 6511.21 | 17-Mar-2023 | 246.77 | 6169.24 | -341.97 | 31.97 |
| OPTIDX_ BANK NIFTY_23-Mar-2023_39 700.0_CE | 100 | 16-Mar-2023 | 260.45 | 260 44.85 | 16-Mar-2023 | 264.65 | 26464.7 | 419.85 | 120.15 |
| OPTSTK_ ITC_29-Mar-2023_40 0.0_CE | 3200 | 24-Feb-2023 | 4.36 | 1394 0.48 | 16-Feb-2023 | 3.94 | 12614.08 | -1326.4 | 46.56 |
| “ | “ | “ | “ | “ | “ | “ | “ | “ | “ |
| “ | “ | “ | “ | “ | “ | “ | “ | “ | “ |
| 6459 181 | 63765 25.68 | -826 55.63 | 2498 5.65 | ||||||
TRANSACTION SUMMARY REPORT FY 2022-23
|
Particulars |
Amount(Rs.) | Remarks |
|---|---|---|
| Intraday Net Profit | -741 | Intraday & Future: – Absolute turnover is equivalent to the sum of all profits & losses made in various transactions throughout the year. |
| Intraday Turnover | 72027 | |
| Future Net Profit | -8536 | |
| Future Turnover | 20918 | |
| Option Net Profit | -82656 | Options: The premium received (sale value) is added back to the absolute P&L number and then posted as turnover. From AY 2022-23, options traders don’t have to include premium received on sale, while calculating the turnover for taxation purposes
Net Profit is after calculating exp / charges. |
| Optional Turnover | 761019 | |
| F&O Charges / Exp | 25848 | |
| Intraday Exp/ Charges | 6113 |
3.5 In the above illustration, a summary report indicating the absolute turnover is available in the demat account. If the said report is not readily available, the individual can calculate the absolute turnover by adding the profit & loss made from F&O transactions during the year.
3.6 The absolute turnover is required to ascertain the Audit applicability & the requirement to maintain accounts as per the Income Tax Act.
4. Step-by-Step Procedure to file ITR 3:
(a) Login to www.incometax.gov.in
(b) The path is: – e-file>Income Tax Return > File Income Tax Return. Select AY 2023-24(Current AY) > online. Start New filing > Individual> Select ITR Form > ITR3> Schedule>Part A > General Information> Audit Information.
(c) Click yes on “Are you liable to maintain accounts as per section 44AA?
• Yes •No
(c)(i) Maintenance of Accounts: As per Section 44AA, an assessee is required to maintain books of accounts if turnover exceeds Rs 10 Lakhs in any of the three immediately preceding years. It is advisable to maintain a simple account statement in case of F&O losses, even if the turnover is less than Rs 10 lakhs in the last three years. The system will not accept a negative figure, hence click on Yes and maintain a simple P&L and Balance Sheet.
(d) Click No on “Are you liable for audit under section 44AB?”
• Yes •No
(d)(i) Audit Requirement: As per section 44AB (a) of the Act, the Audit is required if the total turnover exceeds Rs 10 crores and cash receipts and payments do not exceed 5% of total receipts and payments respectively. Refer article Tax Audit Requirement for F&O Transactions for further details about audit requirements in case of F&O losses
(e) Select code 13018-other financial intermediation services in Schedule Nature of Business. The assessee’s name can be entered in the section “Trade name of the proprietor.” In the description column write “Future & Options”.
(e) Prepare the computation sheet before entering the details in ITR Form 3
Computation Sheet:- Future & Option and Intraday ( Business Income)
Amount in Rs.
| Particulars | Turnover | Gross Profit/ (Loss) | Expenditure Incurred | Net Profit/ (Loss) |
| Intraday | 72027 | 5372 | 6113 | (741) |
| Future | 20918 | (7674) | 862 | (8536) |
| Options | 761019 | (57670) | 24986 | (82656) |
| Total of F&O | 781937 | (65344) | 25848 | (91192) |
(f) Enter the F&O transaction details in Sl. No. 46 of Schedule PL – Part A – P&L Account:
| Sl. | Nature of Exp | Amount
|
| 1 | Future & Option | 65344 |
| 2 | Exp- F&O | 25848 |
| Total | 91192 | |
(g) Enter the intraday transaction details in Sl.65 of Schedule PL – Part A – P&L Account:
| Business | Profession | Speculative |
| 65(i) | Turnover from Speculative Activity | 72027 |
| (ii) | Gross Profit | 5372 |
| (iii) | Expenditure, If any | 6113 |
| (iv) | Net Income from Speculative | -741 |
(h) Prepare Capital Account and enter the details in Schedule BS (Balance Sheet)
Capital Account
| Particulars | Amount(Rs.) | Amount(Rs | Particulars | Amount(Rs.) |
| Proprietor’s Fund
Less: Net Loss ( transferred from P&L Acct) |
100000
– 91933 ____ |
8067 | Cash at Bank | 8067 |
| Total | 8067 | 8067 |
Schedule BS – Balance Sheet: Enter the details as Source of Funds>Proprietor’s Fund, Application of Fund> Current Asset> Balance at Bank, Profit, and loss accumulation balance> total loss amount (91192+741= 91933)
(i) Click “confirm” in Schedule CYLA, BFLA, and CFL & Schedule Special Income. No details are required to be entered in these schedules. The computation of total income, set off / carry forward losses will be calculated automatically.
(j) Enter the details in respect of income from other sources such as salary, Capital Gain & Interest income in respective schedules.
(k) Preview & Submit the Return
5. Other relevant points to remember
(a) Current year loss from F&O trading can be set off against capital gain, income from interest & other sources except for salary income.
(b) Losses arising from intraday transactions are called speculative losses. These can be carried forward for a period of up to four consecutive financial years. Also, they can be set off only against speculative business income made during that period.
6. Current Year Loss Adjustment: The current year loss adjustment will be reflected in schedule CYLA as tabulated below:
| Sl. | Head / Source of Income | Income of the current year | Business loss of the current year set off | Current years income remaining after setting off |
| (i) | Losses to be set off | -91192 | ||
| (i) | Salaries ( after std deduction & Prof Tax) | 427500 | 427500 | |
| (ii) | Income from Interest | 25000 | 25000 | |
| (iii) | LTCG ( after adjustment of STGL) | 305000 | 66192 | 238808 |
| Total | 757500 | 0 | 666308 |
7. Information about accrual/receipt of Capital Gain: The taxable capital gain of Rs 238808 is to be reported in Table F of Schedule Capital Gain in the respective quarter. This is required to calculate advance tax calculation & interest thereof.
8. Intraday losses of Rs 741/- will be reflected in Schedule CFL- details of losses to be carried forward to future years.
******
Disclaimer: The article is for educational purposes only.
The author can be approached at [email protected]
(Republished with Changes)
OPTIONS KE LOSS KO Sr. No. 12C, 12D, 46 OR 65 ME SE KAHAN DIKHAYE AND KYO
Hi,
I have profit in F&O transaction where turnover (as per absolute method i.e adding all losses and profit by ignoring – sign) is 1726087 and profit is 37039.
Please explain how to report this in ITR-3.
Thanks
Hi,
I have profit in F&O transaction where turnover (as per absolute method i.e adding all losses and profit by ignoring – sign) is 1726087 and profit is 37039.
Please explain how to report this in ITR-3.
Thanks
Report profit in :
P&L > Credit to profit & loss Account > Other Income.
Absolute turnover is required to ascertain audit liability only . Not to be reported anywhere in ITR
Hello M’m,
As I’m a salaried employee with less than 50 lac earnings and this year I also got RSU stock with TDS accordingly, but when I sold it, I incurred a loss of around 35k, can I claim this loss while IT returns and using which form? Please guide me. Thanks.
Hello Mam, I am salaried employee My incomes are as follows 1. Salary after STD deduction – Rs. 734000.00, income from other Source – Rs. 21000 (Interest from saving account) F&O losses – Rs 71000.00. can I sett off my interest income from my F&O losses against Income from other source for the current year .
R
Yes , you can do so.
Hello Mam,
I am a salaried person and i have F&O Loss of -2,77,000/- with turnover of 7,50,000/- with Absolute turnover calculation method.
I also have Intraday Profit of 57,000/- with Turnover of 94,20,000/-.
if I club above together, I have loss of 2,20,000 with total turnover of 1.1 crore.
is the tax audit required in above case.
Thank you
Will be glad for your early reply.
Niraj
In case , your payments/ receipts in cash are not more than 5% of gross receipt, threshold limit for tax audit is Rs 10 crores.
Hi Anita,
I would like to know if the Future & Options losses are set off for the currently financial year
can we still carry forward them to the next year ?
for a salaried employee
No , If losses can be set off with the current year income , you are not allow to carry forward for future period.
Hello,
I am salaried person have 20lakh income, 60k other income, 55k capital gains and -28k loss from options. Do i need to maintain balance sheet ?
No , Balance Sheet is not required.
Thanks for the information,
If no balance sheet required then what needs to be filled in the section C of balance sheet, No accounts section ?
Can i enter any value in Amount of the cash balance ?
Invaluable article for small traders mam,
I have a net loss of 3.2L in FnO. The capital (own + borrowed) was added after blow-ups of
account, not a lumpsum. I am not salaried and don’t have other income sources.
Please guide me on my proprietor’s Fund (is my loss amount becomes pr.fund).
Grateful for your kind help mam
Enter the loss amount directly in Schedule P&L > Other expenditure.( If your turnover is less than 25 Lakhs, no need to maintain books of accounts & enter details in Schedule BS > Capital Fund etc)
Great article mam , your help is invaluable for small traders.
I am in net loss of 3.2L trading FnO, the capital(own + barrowed) was added often after the blow-up of account, its not lumpsum. I am not salaried and I’ve no other income.
Please guide me on my Proprietor’s Fund (is my loss amount becomes my pr.fund).
Grateful for your kind help
I am a salaried employee. Received 2.9Lac towards salary, 56K from SBI mutual fund redemption, 4 lac from consultancy service.In option trading, my turnover is around 9Lac and loss is about 5 Lac. Should I eligible for tax audit.
Not liable for Tax Audit.
Very nicely explained Madam, about F&O Transactions. One clarification, can we show the F&O turnover details in Trading Account Schedule or Directly represent them in the P&L account Sl. No. 46. (my case F&O LOSS 195000) If it is entered in the Trading account schedule it is reflected in P&L Account.
You can either enter Sale ,Purchase Value & exp in trading or enter net profit in schedule P&L
Both are correct way to report the transaction
Very well explained ma’am, with informative examples too. Just had a question. The client doesn’t maintain books and first time filing under ITR-3. I have taken opening holding as opening capital and since client doesn’t maintain seperate bank, purchases are routed through capital brought in(as there is loss, taking purchases through bank would cause bank balance to be negative), and sales net of selling expenses through bank. My concern is
a) Is this proper presentation?
b) the closing balance as per bank is not the same as bank statement as other transactions of bank are not included in statement of affairs . Would this cause any problem or could it be explained that since the bank isn’t exclusively used for trading, balance would not reflect the balance as per passbook.
If you do not have F &O losses and turnover is less than 25L, no need to maintain Account & enter details in Schedule BS.
Mam in F&O no account cases P&l it is not accepting negative figure what to do?
Enter the loss amount in schedule P&L > other exp.
My F&O turnover 641144 by absolute methods (Profit 191322, Loss 449822). So net loss from F&O is -258500. I have salary of 10 Lacs and FD interest income Rs. 1Lacs. Now suppose if I show F&O losses as per above article, whether tax audit provisions won’t be applicable as my profit is less than 6% ?
Tax Audit is not required if you had not opted presumptive tax in any of the preceeding 5 years.
Hi Ma’am,
Thanks for the wonderful article. It’s really helpful.
Just one clarification needed. Can you please explain how you calculated the Proprietar’s fund to be 1Lakh.
Let’s assume I have a loss of 10K, how can I get the proprietar’s fund?
1,00,000 is taken just to explain the entry in Schedule BS.
It can be your Bank / Cash balance adjusted with P&L from F&O / business etc.
Hi Sir/Mam, My F&O losses are being set off with my FD interests which is not good as my FD interests are low and I have 0 tax liability – I would like the F&O losses to be carried forward to next year – Is this possible?
Not possible- The option is not given to taxpayer under Income Tax Act
Thank you mam for such a great explanation.
Just a small doubt, in the above case, how did you take the proprietor’s fund as 1lakh? should this be actual deposit we added for trading and will the difference be simply considered as cash?
Not actual deposit.
Difference can be considered as cash
So, if they are not actual deposits then what amount should we show as capital? say if losses are 1.9L, then should i disclose proprietor’s fund as 2L ( an amount close to my losses?) or should this amount be verifiable if questioned?
Hi mam Unable to entre intraday gross loss in s.no 65, speculative, so where can I entre the losses
Sl 65 ( P&L > No Account > Speculative Activity) accepts minus (-) sign.
There should not be any issue in entering loss in Sl N. 65
hello..in case of loss..suppose loss is 30k and turnover calculations is 100000
is it OK if we report turnover 100000 in trading a/c other operating revenue column and then to get loss amount 30k we can put 130000 figure in direct expense?
pls guide
If sale value ( not absolute turnover ) is 1,00,000 and purchase is 1,30,000/- , you can either report sale & purchase value in trading account or report net loss of 30000 directly in schedule P&L Account > other expenses.
Hello Madam,
Very nicely explaned,
I have traded using two accounts zerodha and fyers. both tax PnL shows different turnover values, i have traded Intraday and F&O identically for both the brokers, still it is showing different turnover with huge difference in amount. zerodha is showing 40k and fyers is showing 14 lakh. and have loss of 50k.
My questions are
1. do i need to maintain books of account and tax audit?
2. How do i confirm the exact amount of turnover?
Regards
May be one of the account is calculating absolute turnover of option in old method .
w.e.f 2022-23 , (as per ICAI guideline) sale value is not to be added while calculating absolute turnover of Options.
Tax Audit is not required and you need not to maintain Books of Accounts.
thank you for reply,
it is going to be very helpful for me,
I have some other doubts.
should i use ITR 3 for intrday losses also?
can i carry forward the loses in intraday and fno trading without maintaining books of account and tax auding
Yes, you can do
hello madam, how to fill item 12a of trading account in ITR-3 for intraday trading in no account case.as I fill 12a balance gets c/f to p&l account.
Do not enter the details in 12A of trading Account.
For intraday – No Account: – Enter the turnover & Gross Profit / Loss in Schedule P&L > No Account > Speculative Activity.
My f&o loss about 2 lakhs. Interest income 6 lakhs.
Ltcl. 26000. LTCG. 20000
Pl confirm
1 f & o loss will be adjusted with interest income or not
2 LTCL can be adjusted with LTCG
1. F&O Loss will be set off against interest Income.
2. LTCL of Rs 20000 will be set off against LTCG & balance Rs 6000 LTCL will be carry forward. The same can be set off against LTCG for next 8 years.
Respected Madam
I am a salaried person, having 2,70,000 per year.
I have losses in FnO trading.
I have 3 different broking account.
Which Itr to file. do i need form 16
Please guide in this regard.
How to add losses of different account to one.
Thank you.
Week English
You need to file ITR 3.
Yes Form 16 is required to enter the salary details correctly
Do the total of all the three accounts
My incomes are as follows
1. Salary after STD deduction – Rs. 63146
2. income from other Source – Rs. 277388
3. F&O losses – Rs.( 55791)
4. intraday profit. – Rs. 10862
5. Capital Gain STCG loss. – Rs. (6553)
IT portal accounts my F&O losses against Income from other source for the current year .
is there any provision can I carry over this F&O losses to next year without adjusting to current year since my total earnings itself only 1.26 lacs
there is no such provision where you can carry over this F&O losses to next year without adjusting to current year.
It is specifically mentioned in the act that the losses will be set off first against income in the same financial year and only the balance losses , if any, will be carried forward
Hi ,
I am salaried person with imcome is more than basic exemption limit .
I have FNO loss of 1.5 lakh with turnover around 8 lakh.
i have never opted the presumtive tax schem in past as i am filing ITR3 first time.
Can i set off my FNO loss against other income like (interest and LTCG) without audit ?
audit is not required in my case , right ?
And can i file ITR3 in same way as you mentioned in this artical ?
Thanks
Yes , you can file the ITR in the same way as mentioned in the article.
F&O losses will be set off against other income but not from Capital Gain. LTCL only can be set off against LTCG
Is it mandatory to set off F&O loss against LTCG or F&O loss can be carried forward without setting off against LTCG
It is mandatory to adjust set off the losses from current year income b4 carry forward the losses.
Hello , I’m maintenaning books and account without audit, where and how to report FnO losses in ITR 3. Thanks 🙏
Schedule Trading, P&L and BS of ITR 3.
While trying to enter profit/loss of FnO trading as per your directions in the ITR-3, I could not find the abovementioned S.No. 46 in Part A – PL (I selected 13018 business code)
Has the form been changed? If not, am I doing something wrong?
Form has not changed . Enter the details in P&L Schedule, Sr No. 46- Other Exp.
Still , you are facing any issue, please e mail me :- [email protected]
Please clarify the following:
1. My investment in Equity say: INR 5.0 Lakhs
2. FD: Rs. 5.0 Lakhs
3. F&0 business capital : 10.0 Lakhs
what will be proprietor capital: 10 Lakhs i.e. F&O business capital or 20 lakhs i.e. sum of all
20 Lakhs
Very beautifully explained ma’am!!
I have just two queries in FNO:
1. whether code of business to be selected as 01218 (i.e. for services) or 09028 can also be selected as we are doing simply Trading of FNO as Many experts are doing so?
2. if we are showing turnover and expenses to report FNO losses, then under which head shall we report turnover? sale of goods or sale of services or Other receipts?..
You have wonderfully explained one of the most complicated topics in the field of taxation.. Well explained Article Ma’am.. Thanks
Thank you sir for your humble comment .
You can select code :-09028.
The reporting shall be under the heading “ Other receipts”
Respected Ma’am,
Your article on ITR 3 AY 2023 24 is very informative.In the article you have mentioned where the intraday income is to be reported in no account case.
Kindly let me know where the intraday income is to be reported in ITR 3 where books of accounts are maintained.
Thanks
Yours faithfully
Usha Gupta
Thanks for your humble comment.
It can be reported in Schedule Trading/ P& L Account under the Tab – other income/ exp
Hello ,
I’m maintenaning books and account without audit, where and how to report FnO losses.
Thanks 🙏
Very nicely explained.
no need to mention turnover of f&o in itr ???
Turnover is mainly to ascertain Audit requirements.
Some experts are of opinion that sale value & purchase value is required to be reported in the TAB other income/ expenditure.
Both are right. You can opt either way to report net Profit/ loss
My turnover in Future Currency trading is Rs 4,53,260.00 and there is a loss of more than 1,00,000/-
1. Is tax audit applicable
2. do i have to prepare and submit balance sheet
Tax Audit not applicable.
It is recommended to prepare a simple statement of Accounts .
beautifully explained, with examples.
Thanks for your humble comment.
whether books of accounts is maintained to both intraday and fno??
A simple statement of Accounts indicating both intraday and F&O will do .
Very nicely explained. Beautiful presentation. However, recently turnover for option has been changed in 8th edition of ICAI’s guidance note on tax audit. It excludes adition of sales premium on turnover of option. Only sum on absolute profit/(losses) need to taken for turnover.
Thank you
Thank you sir for humble comment.
You are right. On Aug 2020 , ICAI issued guidelines and accordingly , premium will not be added for ascertaining turnover for option trading. ( though there is no clarification/ circular issued by tax authorities in this regard)
Thank you for your write up! Your guidance will certainly helps lot of tax professionals. Comprehensive one. Thank you again
You are welcome Sir.
Glad to know that it will help tax professionals .
Regards
Calculation of Turnover of not clear from the examples
Like how you have calculated the Intraday Turnover of Rs. 72027 is not clear.
Future is Okay
Option Turnover is again not clear
Calculation of turnover is not covered in the article above.
In the illustration , turnover details have been provided by the broker ( demat ) along with the summary report.
As there were large number of transactions in the illustration , it was not possible to explain the methodology of turnover calculation with clarity.
I will write separate article that will provide clear understanding of turnover calculation in case of F&O and intraday transactions.
Refer Para 3(1) in the article above. The article is revised and method to calculate absolute turnover for intraday and Future & option trading is inserted for reference.
THANK YOU FOR THE INFORMATION
You are most welcome Sir.
Mam, I want to consult my issue in detail regarding filing of ITR for loss in trading account…. let me know, how can I approach you for consultation in details…… 860 502 31 12
Feel free to share your query : [email protected]