@Quicko please clarify on assets & liabilities to be captured in ITR-3 (Schedule BS) for F&O trading. I’m salaried person with small F&O trading. As per 44AA, preparation of books of accounts are required if turnover or income from business activity is above a threshold.
I have pledged part of my equity portfolio (MF/ Shares) to use as margin for F&O trading. While P&L report is available from broker and can be easily replicated in Schedule PL, I’m confused about what all assets to be shown in Schedule BS -
Only related to trading i.e. pledged securities OR
entire personal assets, including savings accounts, securities and fixed assets (both moveable and immoveable)
Would all such assets be reported at book value/ invested amount or current value? Will fixed assets be disclosed at depreciated value?
If all assets, including immoveable assets, are required to be disclosed, what would be the treatment for under-construction house and loan drawn towards it?
As per my understanding, only trading assets i.e. pledged margin should be disclosed in schedule BS. And entire assets and liabilities shall be disclosed in schedule FA if you meet income criteria. Please correct me if otherwise.
There are two way where you can file ITR -3 as per my understanding. One at business level and other one at assesse level. If your income exceeds 50 lakh threshold criteria than you need to file ITR 3 at assesse level i.e. mentioning all personnel asset ,loans, gifts etc apart from business income.
I don’t think this is correct. ITR-3 will be filed at assessee level only. However, if there is any business income with turnover/ income above defined threshold, balance sheet is required for the business (Schedule BS) as per 44AA. However, it need not capture assets not being used in business. Please find below extract from Instructions from Income Tax website:
Any other activity not being accounted in the books of proprietary business or profession, need not be included in this balance sheet
For income above Rs.50 lakhs, schedule AL is also to be filled. However, assets already disclosed in schedule BS are not required to be reported in schedule AL. Extract from Income Tax website:
Please note that the assets and liabilities disclosed in the balance sheet of the proprietary business in part A- BS is not required to be reported again in this Schedule
@Quicko team, can you please assist with these queries
Yes , perfect…you are saying correct I think. But one question regarding Total income. What will be total income for calculation of threshold limit of 50 lakh ? And can we fill schedule AL even though total income is below 50 lakh for our transparency ?
For the balance sheet, you’ll only be required to disclose assets and liabilities related to the business.
Moreover, if your total income exceeds ₹50L, then you are required to fill schedule AL (assets and liabilities) where you’ll have to disclose personal assets. This will be different from your businesses’ balance sheet.
What exactly is meant by assets and liabilities related to business only ? For e.g if one has laptop for personal use on which one also does trading from time to time. Is that to be noted as as asset ? Same for say personal mobile. ?
Also under the business details expense section, I see provision for entering STT also. But isn’t STT anyways considered when you import and sync data from Zerodha. If yes, won’t adding it here lead to double counting?
No it does not clarify yet. Entire mf portfolio is pledged witb zerodha of 1 cr and trading from thag margin. Need to show in investment part then capital will be more than 1 cr if not shown the capital will be only bank balance. What to do.