F&o loss - confusion on how to show the loss
This query is : Resolved
07 August 2011
Hi,
I am trading only in F&O and made the losses for the last 2 years. Last year the tax consultant filed my return in ITR2 and this year another tax consultant filed by using ITR4. I would like to know few points related to Tax filling,
1. Should we need to consider the loss from F&O transactions will be considered as “Loss from business other than loss from speculative business” or Loss from speculative business”
2. I heard Business losses can be carried forward for 8 years and speculation loss can be carried forward for a period of 4 years only.
3. For the F&O transactions, which ITR (2 or 4) form we need use and how many years we can carry forward the losses.
4. Some people are telling F&O losses are needs to be treated as “short term capital loss”, hence ITR 2 has to be used. Some other people are telling anything Derivative transactions, it comes under “Loss from business”, hence ITR 4 has to be used.
5. Last year total loss is 8 lacs and should I need to submit my books of accounts to auditor to audit the same.
Request you to clarify me asap also if possible please give me your email id for further communications.
Thanks
K7
9945539219
I am trading only in F&O and made the losses for the last 2 years. Last year the tax consultant filed my return in ITR2 and this year another tax consultant filed by using ITR4. I would like to know few points related to Tax filling,
1. Should we need to consider the loss from F&O transactions will be considered as “Loss from business other than loss from speculative business” or Loss from speculative business”
2. I heard Business losses can be carried forward for 8 years and speculation loss can be carried forward for a period of 4 years only.
3. For the F&O transactions, which ITR (2 or 4) form we need use and how many years we can carry forward the losses.
4. Some people are telling F&O losses are needs to be treated as “short term capital loss”, hence ITR 2 has to be used. Some other people are telling anything Derivative transactions, it comes under “Loss from business”, hence ITR 4 has to be used.
5. Last year total loss is 8 lacs and should I need to submit my books of accounts to auditor to audit the same.
Request you to clarify me asap also if possible please give me your email id for further communications.
Thanks
K7
9945539219
07 August 2011
As per proviso (d) to secion 43(5) trading in F & O carried out through a recognized stock exchange is not a speculative transaction. Therefore, loss from F & O should be considered as 'normal business loss' for which ITR-4 has to be filed in the asessment year 2011-12. The said loss can be carried forward for eight years provided the return showing the loss has been filed on or before the due date for filing the return.
Message likes :
1 times
07 August 2011
Dear Chackrapani
Thanks for your reply. Would you please advice me whether i need to get my books of accounts to get audited in that case for 8 lacs loss.
Thanks for your reply. Would you please advice me whether i need to get my books of accounts to get audited in that case for 8 lacs loss.
07 August 2011
As u know audit is based on turnover. In F & O , turn over means the absolute value of profit and loss of the tranactions done in an year. So determine the turnover as i said ( 8 lacs loss alone can't determine) and decide upon audit u/s 44AB of the IT Act,1961.
Message likes :
1 times
07 August 2011
Sir,
Please correct me if i am wrong,
Total Buy Value is 10,358,724.50 and total Sell value 9,657,856.60.
Should i need to add both these values to arrive "absolute value of profit and loss of the tranactions done in an year"
If i add both the above values it comes around 20,016,581 (2 crores)
Does this mean i need to submit for audit.
If you don't mind i can send my excel sheet where i made all the transactions in F&O. Would you able to confirm this to me.
Thanks sir
Please correct me if i am wrong,
Total Buy Value is 10,358,724.50 and total Sell value 9,657,856.60.
Should i need to add both these values to arrive "absolute value of profit and loss of the tranactions done in an year"
If i add both the above values it comes around 20,016,581 (2 crores)
Does this mean i need to submit for audit.
If you don't mind i can send my excel sheet where i made all the transactions in F&O. Would you able to confirm this to me.
Thanks sir
07 August 2011
no,
absolute value means net profit or loss from transaction.
eg. A Company future pur @ 600 (100 share lot) and sale @ 650 than absolute turnover is 50*100 = 5000.
absolute value means net profit or loss from transaction.
eg. A Company future pur @ 600 (100 share lot) and sale @ 650 than absolute turnover is 50*100 = 5000.
Message likes :
2 times
07 August 2011
Thanks Anoop sir.
I think you mean cross profit/loss. Am i right.
The total gross value is -700,867 (7 lacs)
But i added other charges from brokerage and showed total loss as 8+ lacs
I think you mean cross profit/loss. Am i right.
The total gross value is -700,867 (7 lacs)
But i added other charges from brokerage and showed total loss as 8+ lacs
07 August 2011
Yes, net of profit and loss and its also include transaction exp.
07 August 2011
Thanks Anoop sir.
Since my gross amount is around -7 lacs, i am assuming that there is no need to submit for audit.
Am i right.
Would it possible for you to quickly go through my excel sheet where i done the computation and advice me whatever i done is correct or not.
Please give me your email id, if you could able to help me here.
Thanks
Regards
K7
Since my gross amount is around -7 lacs, i am assuming that there is no need to submit for audit.
Am i right.
Would it possible for you to quickly go through my excel sheet where i done the computation and advice me whatever i done is correct or not.
Please give me your email id, if you could able to help me here.
Thanks
Regards
K7
07 August 2011
ok, please send me and let me check.
and not need to take your accounts audited.
attach your excel with CCI mail.
and not need to take your accounts audited.
attach your excel with CCI mail.
07 August 2011
Anoop sir,
I don't think i can attach any file by using PM message. I did sent one PM message to you, but no facility of attachment
Kindly send me an test mail to my id kesavan100@yahoo.com
so that i can send the file
Thanks for your understanding
Regards
K7
I don't think i can attach any file by using PM message. I did sent one PM message to you, but no facility of attachment
Kindly send me an test mail to my id kesavan100@yahoo.com
so that i can send the file
Thanks for your understanding
Regards
K7
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- GST on export of services and Input Credit
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Import license renewal
- Credit profit and loss account in case of bonus share received
- How to determine cost of acquisition of shares on De-merger or Merger
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
Trending Online Classes
CAclubindia
