Premium received on “sale of options” is only to be considered turnover. Zerodha’ interpretation is totally wrong on the subject. The previous line on the guidance note also makes it clear:
“The contract notes are issued for the full
value of the asset purchased or sold but entries in the books of
account are made only for the ‘differences’”
The context here makes it clear that, both on options and futures trading, books of accounts shall only consist of “differences”.
Also,
“In respect of any reverse trades entered, the “difference thereon”,
should also form part of the turnover.”
Key theme is “difference”
The premium received on “sale of options” is only included, because people sell options and hold it to expiry, in which case, there is no favourable/unfavourable difference as no reverse trade is entered and it is a compete sale-In which case, by all means, include the premium received.
@nithin Although I’m all for tax compliance, This interpretation is wrong and you should make it clear in varsity that this is at least too liberal. If a person does other business, the turnover sky rockets because of this liberal interpretation and costs other compliance problems like GST. Please also provide options turnover with only differences in the console.