Looking for CA for audit and tax preparation related to stocks trading - Bangalore
- Thread starter kumarsemails
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Re: Looking for CA for audit and tax preparation related to stocks trading - Bangalor
I draw salary, pension and trade in F&O. I have a bunch of about 200 contract notes for the financial year 2014-15. I am expecting my Form 16 within next couple of days.
Clearly I need to file ITR-4. Additionally I need share transactions to be audited to arrive at total tax liability.
Please list out what are all the documents/information you need to carry out the task.
I draw salary, pension and trade in F&O. I have a bunch of about 200 contract notes for the financial year 2014-15. I am expecting my Form 16 within next couple of days.
Clearly I need to file ITR-4. Additionally I need share transactions to be audited to arrive at total tax liability.
Please list out what are all the documents/information you need to carry out the task.
Re: Looking for CA for audit and tax preparation related to stocks trading - Bangalor
Dear Suri,
The basic requirement will be:
1. The list of all the trades carried out
2. copy of ledger maintained with the broker
3. Profit & Loss a/c provided by the broker
4. If you have also dealt in delivery trades, then Demat Account Statement
(the above four should be available online itself)
5. Form 16
6. Form 16A, if any
7. Form 26AS
8. Details of any carried forward loss
With regards to contract notes, they will be checked on a test basis. The list of contract notes to be checked will be decided after receiving the complete trade list.
There may be additional requirements depending upon the Final ITR-4 Form and Audit Report Form (both are expected to be released by Income-tax department soon)
You can forward the above on [email protected]
With regards to fees, the same will shared over email or phone only.
Regards
Dear Suri,
The basic requirement will be:
1. The list of all the trades carried out
2. copy of ledger maintained with the broker
3. Profit & Loss a/c provided by the broker
4. If you have also dealt in delivery trades, then Demat Account Statement
(the above four should be available online itself)
5. Form 16
6. Form 16A, if any
7. Form 26AS
8. Details of any carried forward loss
With regards to contract notes, they will be checked on a test basis. The list of contract notes to be checked will be decided after receiving the complete trade list.
There may be additional requirements depending upon the Final ITR-4 Form and Audit Report Form (both are expected to be released by Income-tax department soon)
You can forward the above on [email protected]
With regards to fees, the same will shared over email or phone only.
Regards
Re: Looking for CA for audit and tax preparation related to stocks trading - Bangalor
actually options are the easiest one to deal with. It is the futures that create more confusion.
For Options, the exact turnover will be difference between premium paid and amount received on expiry or early closure of the position.
For eg you bought 100 nifty at Rs 6. So you pay Rs 600.
Now if you let the option expire, you don't get anything, so Rs 600 will your turnover.
In case you close the option (which you normally do if it helps you to cover premium or sometimes actually make profit, whatever difference is between Rs 600 and the the amounts received on closure, is the turnover.
actually options are the easiest one to deal with. It is the futures that create more confusion.
For Options, the exact turnover will be difference between premium paid and amount received on expiry or early closure of the position.
For eg you bought 100 nifty at Rs 6. So you pay Rs 600.
Now if you let the option expire, you don't get anything, so Rs 600 will your turnover.
In case you close the option (which you normally do if it helps you to cover premium or sometimes actually make profit, whatever difference is between Rs 600 and the the amounts received on closure, is the turnover.
Re: Looking for CA for audit and tax preparation related to stocks trading - Bangalor
@canikhil
As per guidance note on sec44AB of IT act1961 followings are given for Derivatives, Future and Options;
i) Total of favorable & unfavorable differences shall be turnover
ii) Premium received on sell of option is also to be included in turnover
iii) in respect of any reverse trades entered, the difference to be included in turnover.
Nikhil, in view of this I think it will be easy to know turnover of Future rather than options.
@canikhil
As per guidance note on sec44AB of IT act1961 followings are given for Derivatives, Future and Options;
i) Total of favorable & unfavorable differences shall be turnover
ii) Premium received on sell of option is also to be included in turnover
iii) in respect of any reverse trades entered, the difference to be included in turnover.
Nikhil, in view of this I think it will be easy to know turnover of Future rather than options.
Re: Looking for CA for audit and tax preparation related to stocks trading - Bangalor
It depends on how you interpret it. There is a variance amongst tax advisers regarding how you compute favorable or unfavorable differences - day wise, scrip wise, each-settlement wise (as you can do partial closures on transactions).
In such a scenario, I find dealing with options simpler. Or may be I can say that the cases I have dealt in practice were easier on options side.
Regardless once you decide upon how you gonna compute turnover, its all a cakewalk subject to quality of data provided by the broker!
It depends on how you interpret it. There is a variance amongst tax advisers regarding how you compute favorable or unfavorable differences - day wise, scrip wise, each-settlement wise (as you can do partial closures on transactions).
In such a scenario, I find dealing with options simpler. Or may be I can say that the cases I have dealt in practice were easier on options side.
Regardless once you decide upon how you gonna compute turnover, its all a cakewalk subject to quality of data provided by the broker!
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Re: Looking for CA for audit and tax preparation related to stocks trading - Bangalor
lemondew...
care to explain what is incorrect? I haven't dealt with Zerodha..so would like to know more about your views.
In case you are referring to this link http://zerodha.com/z-connect/traders-zone/taxation-for-traders/taxation-simplified then I don't see any contradiction except for atleast I don't agree that you only include sell side of the option contract (this could be true for option writers but not for buyer) and not the net settlement amount. Given that this whole issue of derivative accounting is an unsettled tax issue, it is important that we maintain consistency among different derivative products.
lemondew...
care to explain what is incorrect? I haven't dealt with Zerodha..so would like to know more about your views.
In case you are referring to this link http://zerodha.com/z-connect/traders-zone/taxation-for-traders/taxation-simplified then I don't see any contradiction except for atleast I don't agree that you only include sell side of the option contract (this could be true for option writers but not for buyer) and not the net settlement amount. Given that this whole issue of derivative accounting is an unsettled tax issue, it is important that we maintain consistency among different derivative products.
Last edited:
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