Tax on futures and options trading


If the Loss is not disclosed in the income tax return or the income tax return is not filed before the due date — the loss would not be allowed to be carried forward. It would be determined on the facts of each case whether the delivery based transactions are to be treated as Capital Gains or are to be treated as Business Income. The transactions are also squared up by payment of differences. The contract notes are issued for the full tax on futures and options trading of the asset purchased or sold but the entries in the books of accounts are made only for the difference.

However, for the loss to be carried forward and set offthe loss should be disclosed in the Income Tax Return and the ITR should be filed before the due date of filing of income tax return. If the transactions are considered as Investments, then the tax on futures and options trading would be levied in the manner as described in this article — Treatment of Capital Gains on sale of Delivery based Shares. The transactions may be squared up at any time on or before the expiry date. The contract notes are issued for the full value of the asset purchased or sold but the entries in the books of accounts are made only for the difference.

The expenses incurred for the purpose of Business like Telephone Expense, Internet Expense etc would also be allowed to be claimed in the income tax return. The transactions may be squared up at any time on or before the expiry date. Although the turnover is very high but the profit margin is fairly low.

Select your email service Close Gmail Yahoo! The trader would be required to prepare normal books of accounts under Section 44A of the Income Tax Act. This tax audit would be required to be conducted by a practising Chartered Accountant for each year for which the turnover exceeds Rs.

This can be explained with the help of an example. The trader would be required to prepare normal books of accounts under Section 44A of the Income Tax Act. Select your email service Close Gmail Yahoo! He is also the founder of this website and loves to help people with their Tax Queries.

If the transactions are considered as Investments, then the tax would be levied in the manner as described in this article — Treatment of Capital Gains on sale of Delivery based Shares. As the tax on futures and options trading and value of transactions is very high, the manner of filing of ITR and computing the Turnover for the purpose of Tax Audit is slightly different as compared to other businesses. If the Loss is not set off against the incomes of the same financial yearthen such loss can be carried forward and set off against future incomes.

If the transactions are considered as Investments, then the tax would be levied in the manner as described in this article — Treatment of Capital Gains on sale of Delivery based Shares. Although, the tax audit is required only in cases where the where the annual turnover is more than Rs. This tax audit would be required to be conducted by a practising Chartered Accountant for each year for which the turnover exceeds Rs.

It would be determined on the facts of each case whether the delivery based transactions are to be treated as Capital Gains tax on futures and options trading are to be treated as Business Income. Loss claimed in ITR filed after the due date of filing of Return as Belated Return is not allowed to be carried forward. The contract notes are issued for the full value of the asset purchased or sold but the entries in the books of accounts are made only for the difference. If the Loss is not disclosed in the income tax return or the income tax return is not filed before the due date — the loss would not be allowed to be carried tax on futures and options trading.