hi ritesh,
1) if I buy an nifty option having price 100 (lot size 50) so total premium paid = 5000 , and then sell it for 110 (premium received = 5500) , so net profit = 5500 - 5000 = 500 Rs., now what is the turnover in this case ?
2) now if I do the above same option transaction by selling first then buying later , what will be the turnover?
3) if I buy nifty future @ 6000(lot size 50) and sell it @ 6050, what will be the turnover ?
Ravi, you will find different version/methods mentioned by different CA's. so how you will choose, b/c every CA will explain you his understanding of rules/guidelines and then add a disclaimer that 'maybe other CA using different method, so confirm with your CA before using this' unless you are hiring him. Now, how the hell, persons member of particular body, referring particular guidelines not telling/doing same things. If guidelines are vague or not clear why members (CAs) don't ask for issuing clear guidelines by higher authorities of ICAI whom they elect among themselves.
the one reason could be same as in every expertise field, if things become simple then who will need them. 2nd they don't care if at the end client will suffer, b/c if your case comes under scrutiny, they will get additional business by charging more for presenting your case.
if don't believe, then before hiring any CA, ask if scrutiny begins, will they follow and present your case free of cost (no extra charge other than given for filing return which would be 250-1500 for most of the cases, no fees hidden in form of department bribe etc)
Answer to 1 & 2 is 5500. Premium paid in buying a call or put is a expense
Answer to 3 is (6050*50)-(6000*50)
Regards
CA Ritesh Bafna
Ritesh, you mentioned turnover for 1st and 2nd case asked by Ravi, is 5500. i guess you are following ICAI guidelines for auditing trading business.
two things wanna know, if possible to answer -
1. income tax department, mentioned/issued similar guidelines anywhere in their publications? plz tell me where to look, like link or section of ready reckoner or some other publication for that purpose.
2. if answer to first is yes, then what could be the purpose basically behind IT department treating options differently than futures? and if not then why ICAI wants CAs to treat it differently?
I really appreciate your efforts for helping people and clarifying things. :thumb: