I am a person having turnover of over ₹10 crores in F&O segment, and is liable to be tax audited. If a person is mandatorily required to be audited then, he can voluntarily not pay taxes on unrealised P&L.
Now suppose, if I earned realised P&L of ₹20 lacs in a FY, and before March ending I want to deffer it, I chose to build a hedged position of Nifty Apr Fut long & Nifty May fut short. Because of some margin related issues, I had to build this position on multiple brokers platform with different entry prices and different dates. Since F&O positions are considered to be realised based upon FIFO basis, then would my such positions be considered on cumulative basis for FIFO calculation purpose; or FIFO calculation would be done on each broker separately?
Simplified Example (a little different, but same concept): If i bought 1 lot (75 qty) of Nifty Apr Fut on zerodha @ ₹22,000 and shorted the same contract with 1 lot on Groww @ ₹22,500 on 1st March. Now it’s 1st April (31 days have gone by). On FIFO basis, if applied cumulatively, it would be considered a realised profit of ₹37500 (75 x (22500 - 22000)). If FIFO is applied on individual broker side, then all the P&L would be in unrealised condition. Thus, in one case, there would be a tax liability, and in thelatter part - no tax liability.
Upon contacting the brokers, they say that they would furnish all the information to Govt departments regarding taxation liabilities based upon their individual platform only; and they are absolutely right - how would they be knowing my positions on other broker’s account.
But how should I treat my P&L for taxation purposes?