This thread just gets better day by day, so many doubts clarified before I even encounter them myself 
But still, a few doubts persist...
1) I'm not sure if the term is correct, but can I calculate taxable income of my futures trading simply by subtracting the "opening stock"(bank/broker balance on april 1st) from the "closing stock"(latest bank/broker balance)?
I ask because, I know it's business income and I can therefore deduct brokerage, STT and service tax(is that correct?) as business expenses. And the formula for deduction I believe is:
raw profit - raw loss - brokerage - stt - st - stamp duty - other business expences = actual profit or loss
But isn't that the exact formula the broker uses to calculate my daily "closing stock/balance"? Can I take a shortcut and just calculate using the broker's values?
2) My past auditor has made a mistake in not declaring MFs and govt bonds in previous balance sheets. Since these go all the way back to the Saral days, my current auditor says it's impossible to revise those returns. His suggestion is quite weird(next point), but what would you recommend I do?
3) My current auditor says that balance sheets aren't even required! He says that just paying the IT based on my income(minus any deductions) is enough. That sounds very strange to me, more so because I might fall under the 40L audit bracket.
Thanks in advance
But still, a few doubts persist...
1) I'm not sure if the term is correct, but can I calculate taxable income of my futures trading simply by subtracting the "opening stock"(bank/broker balance on april 1st) from the "closing stock"(latest bank/broker balance)?
I ask because, I know it's business income and I can therefore deduct brokerage, STT and service tax(is that correct?) as business expenses. And the formula for deduction I believe is:
raw profit - raw loss - brokerage - stt - st - stamp duty - other business expences = actual profit or loss
But isn't that the exact formula the broker uses to calculate my daily "closing stock/balance"? Can I take a shortcut and just calculate using the broker's values?
2) My past auditor has made a mistake in not declaring MFs and govt bonds in previous balance sheets. Since these go all the way back to the Saral days, my current auditor says it's impossible to revise those returns. His suggestion is quite weird(next point), but what would you recommend I do?
3) My current auditor says that balance sheets aren't even required! He says that just paying the IT based on my income(minus any deductions) is enough. That sounds very strange to me, more so because I might fall under the 40L audit bracket.
Thanks in advance
1-04-08 - Balance - 100000
31-03-09 - Balance - 80000
means a loss of 20000 in between according to you ???
what about the positions bought after 01-04-08 and sold before 30-03-2009 ???
2. & 3. - Fire your Chartered Accountant !!!
... no just joking... actually i am more baffled by the second one...Mistakes are common so can be committed by all... how many times it might have happened instead of putting a buy order you put in a sell order (has happened with me at least) ...but what the second one is stating is what i have been trying to drill into everyone's to NOT TO DO !!!
EVERYONE SHOULD MAINTAIN THEIR BOOKS OF ACCOUNTS PROPERLY & ACCURATELY !!!
at least maintain....drawing up of the balance sheet is secondary though that too should be done...
Just to give you all one simple fact....My daughter is 2 years old and i even prepare her books of accounts !!! be it just 5 entries in a year but they are prepared...
INSIST ON PREPARING YOUR BOOKS OF ACCOUNTS AND BALANCE SHEET....need not be an audited balance sheet (if not required) but should be made even if it means a few thousand bucks....
what i have said above is all practical...and even from current laws one is required to maintain books if the income is greater than 1.2L from business !!!
OK...now coming to your problem...technically your returns cannot be revised BUT these balance sheets were they filed along with your returns and where they audited ???
these questions if answer is negative then its ok to change the balance sheets otherwise after your reply to them lets see if a solution is possible....
