By popular request, here are the sample ITR3
Thank you very much for the example. From the example in the sheet you have mentioned I think the losses are not mentioned in the ITR excel?
I do not see entries for “Negative Trades - Future” and “Negative Trades - Commodities” however I can see “Positive Trade” entries in the “Trading” sheet which will be computed and carried forward to “P&L” sheet, the below are missing:
- Negative Trades- Futures
- Negative Trades- Commodities
Have they been considered in the excel by some other means?
Raj Pawan Gumdal
“Negative Trades - Future” and “Negative Trades - Commodities” are considered in Purchases(#8) including Trading Charges.
Rs 1,02,048(Negative Future) + Rs 2843707.25(Negative Commodity) + Rs 78335(Trading Charges) = Rs 30,24,090
I see, ok, thank you for the explanation! But I have read somewhere that losses can be declared in “Direct Expenses” (#9) like this below. Is it do-able this way too or there are any repercussions?
Also, wondering where the rest of the line items are accommodated from excel:
Raj Pawan Gumdal
Loss cannot be declared like that in Direct Expenses. Loss should be the effect of Sale Value and Purchase Value. It is suggested to enter sale and purchase value in appropriate fields and arrive the profit or loss.
Does the trading charges include Brokerage+SEBI Turnover+ Exch Transaction charges+Stamp Duty+GST?
If so shouldn’t Stamp duty and GST be entered in Col 10 Duties and taxes, paid or payable, in respect of goods and services purchased (ix) and (xi) instead of Purchases(#8) because Col 8 Says -Purchases (net of refunds and duty or tax, if any) and rest of the charges in Purchases(#8)
Enter all the taxes details in (ix) other than GST and trading expenses excluding taxes; update it in 9 (iii) in Schedule Trading Account.
What are the trading charges(Rs 78335) mentioned in the example? Does that include Brokerage+SEBI Turnover+ Exch Transaction charges+Stamp Duty+GST?
Enter all the taxes details in (ix) - Did you mean 10 (xi) because 10 (ix) is for GST? And I guess there are no other taxes apart from STT which is mentioned in 44. (ix) in Schedule P&L
other than GST and trading expenses excluding taxes; update it in 9 (iii) in Schedule Trading Account.
What are the trading expenses you are referring to? Is it charges mentioned above? And where should GST be included?
I have entered trading related expenses in Schedule P&L - 46. Other expenses. Should that be entered in 9 (iii) instead? And trading charges (Brokerage+SEBI Turnover+ Exch Transaction charges+Stamp Duty+GST) are included in Purchases(#8) as shown in the example in post #3. Is that correct?
Can you share book keeping sample for intraday trading, short term and FNO ?
In the positive trades and negative trades of futures, the actual contact turnover is mentioned ( positive trade as Sales and negative trades as purchase) or only the profit/loss is considered as the turnover ?
only the profit/loss is considered as the turnover.
So how does one show the positive and negative trades in PL. ?
Eg. in case of futures, say 1 lot bought at 11000 and sold at 11500.
Then in PL account -
positive trade as 862500 ( 1150075)
negative trade as 825000 ( 1100075)
Futures Turnover on pl as just 37500 ( 11500-11000) *75
As for determining tax audit applicability, Futures turnover is 37500.
Can you please share the latest file if updated and also show the eg of calculation of futures and options turnover along with its implications on PL
Yes I have checked the module already. Had few operational query so asked for latest sample file along with examples.
As I understand there is a difference in turnover of Futures & Options. It is as I explain below:
Turnover of Futures = Absolute(PnL of Positive Trades) + Absolute(PnL of Negative trades)
Turnover of Options = Absolute(PnL of Positive Trades) + Absolute(PnL of Negative trades) + Sum of ‘sell’ of all premiums
It’s very clearly explained here with example in this post: F&O Turnover, Taxation, Audit & More
Following this I have a doubt regarding the example sheet provided. We have been entering the sum of all positive trades in Schedule Trading Account under 4.A.iii and mentioning all negative trades along with expenses borne in Schedule Trading Account under 8. Now, does this account for correct turnover because we are leaving out the Premium received by selling options completely here and also we end up including the other expenses as part of turnover here, isn’t it?
Request experts to help us out. I really don’t want to hire a CA and pay them money to file the taxes to show the losses I have incurred in Trading Would have been most happy to pay a CA if I had earned buck load through trading activity
Raj Pawan Gumdal
If you are an active trader, I think you should get your financials audited by a CA in any case, It won’t be more than a few thousand rupees. Audit will also help you carry forward your losses to the next year.
This point is debatable if premium should be used to calculate turnover or not. We have taken the most conservative stance in the module. About other expenses, yeah, you can show that also as part of turnover. Like I just mentioned above, it is painful, but get it audited in any case if you are trading actively. Since all statements are available online, there is barely any work for you or the CA.
it is time you establish a zerodha approved CA panel (region/state wise ) with a flat rate (in slabs)
out of 5 million customers you have ,atleast 1 million need tax audit (I guess)
Since both income tax dept & auditirs are very vague in so mnay aspects, a specilaised Equity tax filing audiotor will be welcome.
Quicko is good (even for filing free) but they dont commit on audit fees,
We need a flat rate tax audit filing CA’s.
I am no tax expert, far less a CA, but after having filed my FY20-21 returns recently, I can appreciate why a CA firm may not want to commit to flat rate auditing or filing.
Most of the time and effort that went into filing my returns involved retrieving the financial data from various sources (banks, mutual funds, brokers, etc.) and preparing the data to match the formats that the ITR form requires. I think even a CA will have to spend this amount of effort—they are probably much faster than me, so they will take lesser time—to get all this done.
Add to this the effort involved in making the client gather all the required data by, e.g., logging in to various places, chasing customer care when that doesn’t work, and so on, and I doubt any CA can survive by offering flat rates; they will have to base their charges on the actual effort needed. And this effort has no relation to, say, how much profit someone makes; I can have hundreds of lines to fill in the beloved Schedule 112A, though I made a net loss in the lakhs (especially if I made a net loss in the lakhs?).
So they will have to base their charges on the estimated amount of work.