{"id":23273,"date":"2021-12-22T11:08:22","date_gmt":"2021-12-22T05:38:22","guid":{"rendered":"https:\/\/itatonline.org\/digest\/?post_type=qa&#038;p=23273"},"modified":"2022-01-05T05:24:39","modified_gmt":"2022-01-04T23:54:39","slug":"tax-audit-f-o-trading","status":"publish","type":"qa","link":"https:\/\/itatonline.org\/digest\/qa\/tax-audit-f-o-trading\/","title":{"rendered":"Tax Audit F &amp; O Trading"},"content":{"rendered":"<p><strong><u>How to Prepare Trading &amp; Profit &amp; Loss Account for F &amp;O Trading in Case of Tax Audit<\/u><\/strong><\/p>\n<p><strong>Futures and options (Non-speculative transactions)<\/strong><\/p>\n<p>In Normal scenario, turnover for Futures &amp; Options is determined as follows \u2013<\/p>\n<ul>\n<li>The total of favorable and unfavorable differences shall be taken as turnover<\/li>\n<li>Premium received on sale of options\u00a0is also\u00a0to be included in turnover<\/li>\n<li>In respect of any reverse trades entered, the difference thereon should also form part of the turnover.<\/li>\n<\/ul>\n<p>For understanding the above Turnover is taken as <strong>\u201cCalculated Turnover\u201d.<\/strong><\/p>\n<p><strong>My question is when an assessee opts for Tax Audit in F &amp; O Trading; Turnover to be credited in Trading &amp; Profit &amp; Loss Account shall be <\/strong><\/p>\n<ol>\n<li><strong>Normal Turnover<\/strong> or<\/li>\n<li><strong>Calculated Turnover.<\/strong><\/li>\n<\/ol>\n<p>If we have to go for Option (1), <strong>Normal Turnover<\/strong> shall be credited in the Trading &amp; Profit &amp; Loss Account and normal Purchase value along with all the expenses such as Securities Transaction Tax, Stamp Duty, Brokerage, Exchange Transaction Charges, GST, SEBI Turnover Fees etc. shall be debited in the Trading &amp; Profit &amp; Loss Account , the balance being the Net profit\/Loss.<\/p>\n<p>But if we have to go for Option (2), <strong>Calculated Turnover<\/strong> shall be credited in the Trading &amp; Profit &amp; Loss Account.<\/p>\n<p><strong>But how to account for the difference in Turnover (Normal Turnover Vs Calculated Turnover) .<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li><strong>Suppose Normal Turnover (Sell value) in case of F&amp;O Trading is Rs. 250.00 Lacs and Calculated Turnover comes at Rs. 50.00 Lacs <\/strong><\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li><strong>Now, since we have to credit Rs. 50.00 Lacs in the Trading &amp; P &amp; L A\/c (Calculated Turnover), How to adjust the difference of Rs. 200 Lacs (250 \u2013 50)?<\/strong><\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li><strong>Shall the difference be adjusted with the normal purchase value?<\/strong><\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<ul>\n<li><strong>Whether all the expenses such as Securities Transaction Tax, Stamp Duty, Brokerage, Exchange Transaction Charges, GST, SEBI Turnover Fees etc. shall be debited in the Trading &amp; Profit &amp; Loss Account?<\/strong><\/li>\n<\/ul>\n","protected":false},"comment_status":"open","ping_status":"closed","template":"","qa_expert":[33],"qa_category":[23],"qa_tag":[463,476,141,81,101],"class_list":["post-23273","qa","type-qa","status-publish","hentry","qa_expert-advocate-shashi-ashok-bekal","qa_category-income-tax","qa_tag-fo","qa_tag-futures-and-options","qa_tag-speculation-income","qa_tag-tax-audit","qa_tag-turnover"],"acf":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa\/23273","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/qa"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=23273"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=23273"}],"wp:term":[{"taxonomy":"qa_expert","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_expert?post=23273"},{"taxonomy":"qa_category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_category?post=23273"},{"taxonomy":"qa_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/qa_tag?post=23273"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}