Comment on Taxation Simplified

Hi Nithin,

This is a very helpful blog! I got most of the answers to my doubts and am left with only two doubts:

1> For calculating the turnover, do we need to treat each trade seperately or do we need to club together all the trades of one contract?
e.g. Suppose I did 2 trades on NIFTY-Jun series contract. One profit of 1000/- another loss of 1000/-. Since its on same contract, is the turnover zero or is it 2000/- ?

2> Suppose my final figures for the year are:
Profits: 1,00,000, Losses: 40,000, Turnover: 1,40,000
STT: 4,000 Stamp charges: 1,000 turnover charges: 1,000 servicetax: 1,000 commisions: 2,000
Total_expenses: 9,000
Net_Profit = 51,000

Then in ITR4, where do I put these numbers in the P&L section?
Option 1:

3.f. Profit on sale of investment being chargeable to STT: 60,000

8. Duties, taxes, Cess, in respect of services purchased
e. Service tax: 1,000
g. Any other tax: 6,000

23. Commisions: 2,000

Above method computes correct tax but turnover of 1.4 lakh doesn’t appear anywhere because profits and losses are netted and put in 3.f.

Option 2:

1. Sales/Gross reciepts of business: 1,00,000

36. Other expenses: 40,000

8. Duties, taxes, Cess, in respect of services purchased
e. Service tax: 1,000
g. Any other tax: 6,000

23. Commisions: 2,000

This method too calculates same tax. Only purpuse of using the “Sales” and “Other expenses” fields is to be able to show the turnover somewhere. But looks such mapping from profits and losses seems meaningless.

Please advise if any of the above two classifications seems okay or if there is a better way?

Thanks,
Makarand.

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