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.
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.
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