ITR3 balance sheet and P&L for 50k profit from F&O trading
This query is : Resolved
11 September 2020
Hi,
I have 50k profit from F&O trading in past FY, which requires ITR3 as its considered as business income.
How to fill up balance sheet and P&L schedule for this income.
Thank you
I have 50k profit from F&O trading in past FY, which requires ITR3 as its considered as business income.
How to fill up balance sheet and P&L schedule for this income.
Thank you
13 September 2020
Yes ITR-3. You need to calculate your turnover from F&O, if that exceeds a specific limit, then you need to maintain books and conduct audit.
If you turnover is below the limit, then you could ignore balance sheet, P&L.
For any queries, you could contact on caankithjain@gmail.com
14 September 2020
Thanks, Ankith. Could you please suggest, how to account in ITR for a loan given to a PVT LTD, where the person is also a director and shareholder.
02 August 2024
For filing ITR-3 with income from Futures and Options (F&O) trading and for reporting a loan given to a Private Limited Company where you are a director and shareholder, you need to follow these steps:
### 1. **Filing ITR-3 for F&O Trading Profit**
#### **Profit & Loss Account (Schedule BP)**
- **Part A – Profit and Loss Account**:
- **Gross Receipts**: Report the total turnover from F&O trading. Since the turnover for F&O is generally substantial, make sure to enter the total gross receipts here.
- **Net Profit**: Report the net profit from F&O trading as mentioned (₹50,000). This is shown as your business income.
#### **Balance Sheet (Schedule BS)**
- **Assets**:
- **Current Assets**: Include any receivables or cash related to F&O trading.
- **Fixed Assets**: If applicable, include any trading software or other assets used for trading. For most traders, this might be minimal or zero.
- **Liabilities**:
- **Current Liabilities**: Include any outstanding liabilities related to trading.
#### **Other Schedules**:
- **Schedule DPM**: If you have any investments in Plant and Machinery used for the trading business, mention them here. This might not be applicable for F&O trading but should be considered if applicable.
### 2. **Accounting for Loan to a Private Limited Company**
#### **Balance Sheet (Schedule BS)**
- **Assets**:
- **Loans and Advances**: Report the loan given to the Private Limited Company under the “Loans and Advances” section of the assets. This should be shown as a long-term or short-term loan based on the repayment period.
- **Liabilities**:
- **Current Liabilities**: If you have any liabilities arising out of this loan, mention them here.
#### **Additional Points**:
- **Interest on Loan**: If there is any interest income received from this loan, it should be reported under “Income from Other Sources” in ITR-3.
- **TDS on Interest**: Ensure that any TDS on the interest income from this loan is properly accounted for in your tax return.
### **Steps to Fill ITR-3**:
1. **Download ITR-3 Form**:
- Download the ITR-3 form from the Income Tax e-filing portal or use the Excel utility provided.
2. **Complete Schedule BP (Business or Profession Income)**:
- Fill in the details for the Profit and Loss Account and Balance Sheet. Report your F&O trading profit and provide the necessary details.
3. **Complete Schedule BS (Balance Sheet)**:
- Enter the details of your assets and liabilities, including the loan given to the Private Limited Company.
4. **E-Filing**:
- After completing the form, generate the XML file and upload it on the Income Tax e-filing portal.
- Ensure all required fields are filled correctly and verify your entries to avoid discrepancies.
### **Conclusion**:
- **Profit & Loss Account**: Report the profit from F&O trading as business income.
- **Balance Sheet**: Include assets and liabilities, including any loans given.
- **Income from Loan**: Report any interest income separately.
If you are unsure about any specific entries or calculations, consulting a tax professional or chartered accountant can help ensure accurate and compliant filing.
### 1. **Filing ITR-3 for F&O Trading Profit**
#### **Profit & Loss Account (Schedule BP)**
- **Part A – Profit and Loss Account**:
- **Gross Receipts**: Report the total turnover from F&O trading. Since the turnover for F&O is generally substantial, make sure to enter the total gross receipts here.
- **Net Profit**: Report the net profit from F&O trading as mentioned (₹50,000). This is shown as your business income.
#### **Balance Sheet (Schedule BS)**
- **Assets**:
- **Current Assets**: Include any receivables or cash related to F&O trading.
- **Fixed Assets**: If applicable, include any trading software or other assets used for trading. For most traders, this might be minimal or zero.
- **Liabilities**:
- **Current Liabilities**: Include any outstanding liabilities related to trading.
#### **Other Schedules**:
- **Schedule DPM**: If you have any investments in Plant and Machinery used for the trading business, mention them here. This might not be applicable for F&O trading but should be considered if applicable.
### 2. **Accounting for Loan to a Private Limited Company**
#### **Balance Sheet (Schedule BS)**
- **Assets**:
- **Loans and Advances**: Report the loan given to the Private Limited Company under the “Loans and Advances” section of the assets. This should be shown as a long-term or short-term loan based on the repayment period.
- **Liabilities**:
- **Current Liabilities**: If you have any liabilities arising out of this loan, mention them here.
#### **Additional Points**:
- **Interest on Loan**: If there is any interest income received from this loan, it should be reported under “Income from Other Sources” in ITR-3.
- **TDS on Interest**: Ensure that any TDS on the interest income from this loan is properly accounted for in your tax return.
### **Steps to Fill ITR-3**:
1. **Download ITR-3 Form**:
- Download the ITR-3 form from the Income Tax e-filing portal or use the Excel utility provided.
2. **Complete Schedule BP (Business or Profession Income)**:
- Fill in the details for the Profit and Loss Account and Balance Sheet. Report your F&O trading profit and provide the necessary details.
3. **Complete Schedule BS (Balance Sheet)**:
- Enter the details of your assets and liabilities, including the loan given to the Private Limited Company.
4. **E-Filing**:
- After completing the form, generate the XML file and upload it on the Income Tax e-filing portal.
- Ensure all required fields are filled correctly and verify your entries to avoid discrepancies.
### **Conclusion**:
- **Profit & Loss Account**: Report the profit from F&O trading as business income.
- **Balance Sheet**: Include assets and liabilities, including any loans given.
- **Income from Loan**: Report any interest income separately.
If you are unsure about any specific entries or calculations, consulting a tax professional or chartered accountant can help ensure accurate and compliant filing.
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