Books of accounts for intraday traders

[gambler]

I hope you know how to calculate the turnover

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I dont know the proper method to calculate turnover. My buy side for intraday equity cash was 24 crores approx. I hope for equity cash turnover this turnover is nothing.

 

[PUCHU_2500]

I dont know the proper method to calculate turnover. My buy side for intraday equity cash was 24 crores approx. I hope for equity cash turnover this turnover is nothing.

meet any income tax lawyer with your bank pass books, trading statements and other documents, he will solve your problem. forget your 24 or 240 crore turnover, that is nothing but notional value. that will not come to add in your books of accounts.......

 

[niftygupshup]

I got notice for fy 2013-14 i trade equity cash only and trading since 2008. But got such notice first time.

Trading equity cash comes under speculative trading category. I do not know whether or not, you have shown this income or loss in your previously filed ITRs.

Had words with one of my known CA regarding this issue. He told me no need to worry as i dont require to maintain any books of accounts.
As i do purely intraday in equity cash. I think for equity cash turnover means profit and loss amount for that particular year. Turnover here should not mean buy value or sell value.

This would be the best course of action to sort out this matter, with the help of a professional.

 

[OneThatGotAway]

My case is similar
i trade in options
i have got similar notice my turn over for year 2013 was only slightly over 1 crore

and tax date with officers is in August. one of my freind suggested why wait tilldate just go and meet office right way ..

i am do that

In my view paying 15k and walk off is good thing better then paying 1.5 lakhs fine.
do take advice of your Ca before doing that tho

No worries

there formula is Buy value + sell value * 0.8% ..they conside is as u are sitting on that much profit already.
so in eyesof govt

24 + 24 *.8 = 0.38
[all fig in crore ]
There mantra is ....
payed tax on 0.38 ? nope then pay penalty

Indian :- but it was loss
then pay penalty for non maintaining of book of account.

Indian :- no i don;t want to pay that
then pay money to my advocate lol 15 k and we call it a day

Indian :- so left or right u will make money out of me either i am in profit /loss
YEs and we will buy another world wide tour for Pm and weapons that we will never use in war in futures .
LoL

 

[Happy_Singh]

Had words with one of my known CA regarding this issue. He told me no need to worry as i dont require to maintain any books of accounts.
As i do purely intraday in equity cash. I think for equity cash turnover means profit and loss amount for that particular year. Turnover here should not mean buy value or sell value.

I dont know the proper method to calculate turnover. My buy side for intraday equity cash was 24 crores approx. I hope for equity cash turnover this turnover is nothing.

For equity and Futures calculations of turnover is simple.

We buy say 100 of something for 5000 and sell it for 5100

here even if you buying value is 500,000/- and selling value is 5,10,000/-

the turn over in this case is 100 * (5100-5000) = 10,000/-
i.e. the difference in buying/selling value * quantity (or what we usually call as M2M)

Now even in case of loss of say 100 the turnover will be same
i.e buy 100 @ 5000, sell at 4900, TO = 10,000/-

Hope this helps for calculating TO.

As for dealing with the IT guys its better if you take help from a professional or someone who has dealt with them before.


Happy

 

[Krushna]

I already submitted scriptwise profit and loss with IT department that i get from broker.

hi Gambler,
"scriptwise" means do we need to give details of each and every trade? That would be huge task... Or just scriptwise profit/loss? Then how would they trust that its correct? Have been trying to understand this but unable... Even asked TSO chat but they said that its available in Backoffice... And in Backofifice they dont give sriptwise PnL. So how to deal with this?

 

[princy01]

Hi,
Can anyone inform when an intraday trader is required to maintain books of accounts. Actually i got notice from income tax office and income tax officer told me to show books of accounts for that financial year. I already provided him ledger of broker. Here i want to infom you that my main income is from salary.

That income tax officer told me that he could impose me fine of rs. 1.5 lac for not maintaining books of accounts.

Kindly help regarding this.

How did it go?

 

[nac]

hi Gambler,
"scriptwise" means do we need to give details of each and every trade? That would be huge task... Or just scriptwise profit/loss? Then how would they trust that its correct? Have been trying to understand this but unable... Even asked TSO chat but they said that its available in Backoffice... And in Backofifice they dont give sriptwise PnL. So how to deal with this?

You can get scrip wise profit or loss summary from back office. Check again.

Scrip wise doesn't mean each and every trade. It's "scrip wise" not "trade wise".

Eg: If you have traded NIFTYFUTAUG16 100 times, difference between buy average price and sell average price multiple by total quantity traded will give you scrip wise profit or loss.

This (scrip wise) is not the right way to calculate turnover, but this is what our broker gives. The right way is to calculate trade wise. (Zerodha claims they are giving trade wise summary).

Why scrip wise is not right?

Say, you buy 1 lot NIFTY FUT @ 8600, market moves in your favour you add one more lot @ 8700. Now market drops, you sell both the lots @ 8650.
Scrip wise calculation would give you turnover as "0" (buy average price 8650, sell average price is 8650 i.e. 8650-8650 = 0). How can there be a zero turnover after transactions have taken place?

Trade wise calculation would give you turnover of 7500
(8650-8600 = Profit of 50 points i.e, 3750
8650-8700 = loss of 50 points i.e, -3750)
Turnover is equals to sum of profits and losses

 

[tradertrader]

Speculative transaction (intraday cash trading)- The aggregate of both positive and negative differences to be considered as the turnover.
Means your gross profit+gross loss.(Not the amount used as margin or share value)

Derivatives, futures and options-
1) The total of favorable and unfavorable difference same as intraday.
2)Premium received on sale of option is also to be included. Repeat premium received.

Delivery based-Total gross sales value.


Need to maintain books of account when income from business profession exceeeds rs 120000 or his total sales, turnover or gross receipt exceed rs 10 lakhs .

Penalty- is rs 25000 Section 271 A

(Sec 44AA requires the assessee to maintain the books. As per sec 271A, penalty can be levied in case where the books are not maintained as per sec 44AA. Where the case of the assessee falls under sec 44AA and sec 44AB and the assessee claims that he did not maintain books of account, levy of penalty under both the sections namely 271A and 271B are not possible as per the case of Ram Prakash C Puri – 77 ITD 210. Where penalty is already levied u/s 271A for not maintaining books of account, another penalty u/s. 271B for not getting the accounts audited cannot be levied.)

Now way rs 1.5 lakhs tell that income tax lol hungry for bribe.
Prepare your account in tally just take 1 night max.
Calculate your turnover let him dance.
Dont get fooled by any tax consultant. I had turnover of 100 crores per month as per brokerage purpose but I am aware of these rules as was Ca final student earlier. Many people dont know these small things but I was in same boat and professional trying to foooled me. I get one query on their portal about my transaction and I replied in yes and taught them rules. Nothing has happened.

Penalty for Rs 1.5 laks is for non audit and if books not maitained no audit required. So check your turnover then prepare books.
Ask your broker statement in which proper seggregation of cost etc and transaction done and throw on his face just take one night do it in tally.
All the best.

 

[Krushna]

You can get scrip wise profit or loss summary from back office. Check again.

Yes, thank you, i checked and found.

Scrip wise doesn't mean each and every trade. It's "scrip wise" not "trade wise".

Eg: If you have traded NIFTYFUTAUG16 100 times, difference between buy average price and sell average price multiple by total quantity traded will give you scrip wise profit or loss.

This (scrip wise) is not the right way to calculate turnover, but this is what our broker gives. The right way is to calculate trade wise. (Zerodha claims they are giving trade wise summary).

Why scrip wise is not right?

Say, you buy 1 lot NIFTY FUT @ 8600, market moves in your favour you add one more lot @ 8700. Now market drops, you sell both the lots @ 8650.
Scrip wise calculation would give you turnover as "0" (buy average price 8650, sell average price is 8650 i.e. 8650-8650 = 0). How can there be a zero turnover after transactions have taken place?

Trade wise calculation would give you turnover of 7500
(8650-8600 = Profit of 50 points i.e, 3750
8650-8700 = loss of 50 points i.e, -3750)
Turnover is equals to sum of profits and losses

Again this is very clear explanation of difference between scripwise and tradewise. However, above example gives rise to one doubt:
Suppose I buy one stock (Equity or Future) 10 qty at 100, then 10 qty at 110.
Then I exit it in 5 parts , say 4 at 98, 3 at 114 , 5 at 115, 3 at 117 at 5 at 120.
Then in such situations, how will it be calculated?
Or is it that the first buying of 10 qty is considered as 10 trades and second buying as 10 more trades?
And then each sale order is used for calculating profit/loss of that trade (may be matching ona time basis - i.e. 1st buy matched with1 sale) and calculate the turnover?