Question: Is Audit Compulsory For F&O Loss?

Is statutory audit compulsory for all companies?

Statutory Audit as the name suggests is a compulsory audit for all companies.

Every entity which is registered under the Companies Act, as a Private Limited or a Public Limited company has to get its books of accounts audited every year..

Can F&O loss be set off against business income?

It is important to note that F&O losses can be set off against other incomes (except salary) in the financial year in which the loss was incurred. However, if this loss is carried forward to future years, it can only be set-off against business income of that year.

What is turnover in F&O?

Calculation of turnover in case of F&O Trading The total of positive and negative or favourable and unfavourable differences shall be taken as turnover. Premium received on sale of options is to be included in turnover.

How can I do F&O trading?

Step 1: Buy Equity Future Assuming that you have an account with a share broker in India to trade in F&O segment; the first step is to buy (or sell in case of short-selling futures) a future contract. You can visit NSE or BSE websites to check the available future contracts for indexes as well as securities.

What is difference between future and option?

In essence, a futures contract is an obligation to the buyer to buy an asset and to the seller to sell the asset, at the future price at a specified future date whereas an options contract gives the buyer a right, and not an obligation, to buy the asset and the seller has an obligation to sell the asset at a …

Is audit required for intraday trading?

Under section 44AB of the Income Tax Act, 1961 intraday trading tax audit for traders is mandatory, if: – Presumptive business income turnover (profit/loss) is more than Rs. 2 crore in a financial year. – Normal business income turnover ( profit/loss) exceeds Rs.

What is the minimum turnover for audit?

A taxpayer is required to have a tax audit carried out if the sales, turnover or gross receipts of business exceed Rs 1 crore in the financial year. However, a taxpayer may be required to get their accounts audited in certain other circumstances.

Is audit mandatory for F&O loss?

15 lakhs which are greater than the basic exemption limit of Rs 2.5 lakhs. Thus, tax audit becomes compulsory and filing of balance sheet and profit and loss in the income tax return are mandatory in this case.

Who can use ITR 3?

ITR-3. The Current ITR3 Form is to be used by an individual or a Hindu Undivided Family who have income from proprietary business or are carrying on profession. The persons having income from following sources are eligible to file ITR 3 : Carrying on a business or profession.

What is audit limit?

​​​As per section 44AB, following persons are compulsorily required to get their accounts audited : • A person carrying on business, if his total sales, turnover or gross receipts (as the case may be) in business for the year exceed or exceeds Rs. 1 crore.

Is audit compulsory in case of loss?

In case of loss, since there is no income, therefore it does not exceed the maximum amount not chargeable to tax and so the second condition mandating tax audit u/s 44AB r/w section 44AD is not satisfied and therefore the assessee is not required to get the accounts audited u/s 44AB.

How do I show F&O loss in ITR?

Treatment of Loss arising in F&O Transactions However, for the loss to be carried forward and set off, the 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.

What is F&O expiry?

An expiration date in derivatives is the last day that derivative contracts, such as options or futures, are valid. … Before an option expires, its owners can choose to exercise the option, close the position to realize their profit or loss, or let the contract expire worthless.

What happens when a stock is in F&O ban?

When the stock F&O contracts are in the ban period, no fresh positions are allowed for any of the futures and options contracts in that stock. You will only be allowed to exit the existing positions during this period. The ban is reversed only if the open interest falls below 80%.

How do you treat F&O in ITR?

Since income from F&O enjoys the presumptive scheme of taxation, you can use the relatively simpler ITR 4 as well. “F&O gains are treated as non-speculative business income and hence qualify for presumptive taxation,” says Karan Batra, a Delhi-based chartered accountant.

How do you calculate F&O turnover?

In simpler terms, under F&O trading, the turnover of futures will be the absolute profit, which is the sum of positive and negative differences. The turnover of options can be calculated by adding the premium obtained on selling the options to the absolute profit.