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Maintain Accounts.

Harshit (Arbitrager) (215 Points)

14 July 2011

Hello All,

I am a Arbitrager by Profession (Basically, Shares Trading) and I work on a profit sharing basis, I do get a Form 16A from my employer. I file my returns using the ITR4. I have few queries, if someone can asnwer them.

1) Do I need to make a manual entry of each and every Bank transaction in Tally. Wont a Consolidated Back statement from 01st Aprilt to 31st March do?

2) I do a Computation of my income in Excel sheet, Which is created by me and not in any particular standard format, will it do? or I need to Maintain particular accounts in tally or other format etc?

3)Can anyone help me with a List of Documents i need to maintain ?

Thanks & Regards,

Harshit Patel

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4 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 14 July 2011

If time permits you can keep your accounts in a reasonable software say tally.

If not also you can use personalised excel spreadsheets showing all the information

You can also use the xl format of your banking statement to make the required statement.s.

All one would want to look at is whether you have kept all the accounts propertly or not and whether you have sufficient information.

Also contact your broker and obtain a P & L Statement for the period from them . You can use the said profits or loss in your income tax returns.

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C.A. Jignesh N. Mehta (C.A.) (1030 Points)
Replied 14 July 2011

Since you are a Professional and work on profit sharing basis.

It is necessary for you to maintain accounts in any software say TALLY.

The reasons behind this are as follows:-

1. To determine your turnover for the purpose of TAX AUDIT under 44AB which for professional is 15 Lacs.

2. To account all bank entries and your professional transaction for share trading.

3. You can settle your accounts with the partner having share of the income.

4. You can verify the form 16A with the data entires maintained by you and rectify any errors.

There are many other reasons to maintain accounts.

Think on it and post your further queries.

Harshit (Arbitrager) (215 Points)
Replied 19 July 2011

@ Pravin - Thanks for your Response, I think it Cleared Most of my Doubts...I do maintain bank Statments in excel and also have PLsummary and ledger from my Broker.....Hey do u have any format ready for "personalised excel spreadsheets" ??

@ Jignesh - Thanks for Ur Feed back.... on the reasons u have provided for using tally...just want to clarify on this reason...

1) Professional income is less than 15lacs ..so tax audit is out of question

2)I do Maintain "bank Statements" in excel to account for Bank Entries and for Demat , i do have PL summary and Laedger maintained in excel from the broker.

3)its only simple Pl report that we use to settle the accounts with the Partner.. on a monthly basis.

4)This point mentioned by U...seems to be useful...

My follow-up Query is....

Q.1) What alternates do we have other than tally....I do not know how to Operate "Tally"...any other option Available.

Q.2) If I am showing something as Expense, Like Mobile Bills, Travel Expense... do i need to maintain Bills for the same..

Thanks...

Harshit Patel

C.A. Jignesh N. Mehta (C.A.) (1030 Points)
Replied 22 July 2011

There is a software called BUSYWIN, but i think it is even more complicated than tally, wait for others to reply on it. I dont have much idea on accounting softwares.

If you are showing any expense then it would be good to maintain those bills (if you have), it would support you when there arises any query or issue or dispute.