Calculating turnover for Future & Option traders

Calculation of turnover in case of F&O Trading

Determination of turnover in case of F&O is one of the important factors for every individual for the income tax purpose. Turnover must be firstly calculated, in the manner explained below:

1. The total of positive and negative or favourable and unfavourable differences shall be taken as turnover.
2. Premium received on sale of options is to be included in turnover.
3. In respect of any reverse trades entered, the difference thereon shall also form part of the turnover.

Here, it makes no difference, whether the difference is positive or negative. All the differences, whether positive or negative are aggregated and the turnover is calculated.

For computation of turnover of futures,  the total of positive and negative or favourable and unfavourable differences shall be taken as turnover.

Similar will be the case pertaining to speculation income the total of positive and negative or favourable and unfavourable differences shall be taken as turnover.

Expenses

Expenses such as postage, conveyance and telephone, incurred for carrying on the business can be claimed as business expenses. You can also claim depreciation on assets used for the business or profession.