Comment on Taxation for Traders - Introduction

Nithin, I consulted a friend CA who also is a partner of trading firm in FO and as per him for the turnover purpose only net of difference of profit and loss trades have to be considered and that too on the basis of EACH trade by FIFO method and not on the basis of contract wise total for that particular contract. For this purpose he has a software to generate this report as none of the brokers give this report as per him.
Also he mentioned that the sell value of Options in the turnover is only for naked sell options which are NOT squared off by the trader and are settled by the exchange on expiry either in profit or loss. For all other options trades which are squared off by the trader only the difference for profit and loss (just like in Futures) have to be taken.
But he also said that for retail traders adherence to all such things may not matter as long as correct profit or loss is shown and tax thereon paid, if any.
I am confused now.

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