F & O transactions - Turnover for Sec. 44AB.
This query is : Resolved
03 February 2009
I have 2 queries:-
(1) For an assessee who is engaged in trading of shares, whether transactions of derivatives (F & O) should be considered for calculating turnover for the purpose of Sec 44AB ?? Take an example:- Turnover from trading in shares is Rs. 35 lakhs, Turnover from F & O transactions is 10 lakhs. Then whether Sec. 44AB is attracted ?
(2) F & O is not delivery based. Therefore only the profit or loss is recorded in the books and not sale / purchase. In that case how to compute turnover of F & O transactions for the purpose of Sec. 44AB ??
(1) For an assessee who is engaged in trading of shares, whether transactions of derivatives (F & O) should be considered for calculating turnover for the purpose of Sec 44AB ?? Take an example:- Turnover from trading in shares is Rs. 35 lakhs, Turnover from F & O transactions is 10 lakhs. Then whether Sec. 44AB is attracted ?
(2) F & O is not delivery based. Therefore only the profit or loss is recorded in the books and not sale / purchase. In that case how to compute turnover of F & O transactions for the purpose of Sec. 44AB ??
03 February 2009
1) Yes.
2) Profit and loss are added together to arrive the turnover of F & O transactions. For example ,profit is Rs 100/- and loss is Rs 250/-,turnover is Rs.350/-for the purpose of 44AB.
2) Profit and loss are added together to arrive the turnover of F & O transactions. For example ,profit is Rs 100/- and loss is Rs 250/-,turnover is Rs.350/-for the purpose of 44AB.
Message likes :
1 times
04 February 2009
It is the net profit or loss from Future and Options which is to be summed up to analyse the limit of Turnover in terms of Section 44AB for the purpose of Tax Audit.
In case of derivative trading-Futures and Option- the difference on which the contract is purchased or sold is important. Although the value of contract is number of contract multiplied with the shares price , yet what is actually given or taken is differential amount in contract. For example if you purchase a future contract for Rs 105 for a share having a lot of 100,you pay nothing at the time of buying a contract, yet at the time of expiry of contract , you are either gainer or loser which is determined whether there is positive or negative difference. So , for the purpose of determining the turnover in case of future and options , for the purpose of 44AB , based on the guidance note of ICAI , following items should be considered to constitute turnover
• The total of positive and negative differences , plus
• Premium received on sale of options is also to be included in turnover ,plus
• In respect of any reverse trades entered, the difference thereon
In case of derivative trading-Futures and Option- the difference on which the contract is purchased or sold is important. Although the value of contract is number of contract multiplied with the shares price , yet what is actually given or taken is differential amount in contract. For example if you purchase a future contract for Rs 105 for a share having a lot of 100,you pay nothing at the time of buying a contract, yet at the time of expiry of contract , you are either gainer or loser which is determined whether there is positive or negative difference. So , for the purpose of determining the turnover in case of future and options , for the purpose of 44AB , based on the guidance note of ICAI , following items should be considered to constitute turnover
• The total of positive and negative differences , plus
• Premium received on sale of options is also to be included in turnover ,plus
• In respect of any reverse trades entered, the difference thereon
Message likes :
1 times
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?
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- Applicable TDS rate for sale of property in Nov 2024
- Inventory of finished goods
- Tds on building rent monthly
- RCM INVOICING FROM NOV-2024
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Sale of property furniture sale
- Confusion around Form 26QB fields
- Adjustment entry in the case of Individual and HUF on 31st March
- Stock difference tax applicable on composite rate or normal rate
- 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 ?
Trending Online Classes
CAclubindia
