Computation of Turnover for the purpose of tax audit u/s 44AB - Speculation Business or Derivatives, futures, and options or Delivery based transactions

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....per the Income Tax Act, 1961 alongwith the Guidance Note issued by the ICAI Speculation Business It means a transaction in which a contract for the purchase or sale of any commodity including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips. Thus, in a speculative transaction, the contract for sale or purchase which is entered into is not completed by giving or receiving delivery so, as to result in the sale as per value of contract note. In the case of an assessee undertaking speculative transactions there can be both positive and negative differences arising by settlement of various such contracts during the year. In such transactions though the contra....

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....ions Turnover = Aggregate of Positives & Negatives, the difference amount will be the 'Turnover' Turnover = Total of Favorable & Unfavorable differences shall be taken as Absolute Turnover. Premium, if received in case of Options shall also form part of turnover Example 1 - For Speculative Business Transactions Qty Buy Sell Realized Turnover A 58 9,52,850 9,59,435 6,585 6,585 B 4,205 85,96,345 86,55,295 58,950 58,950 C 3,850 3,59,864 3,51,614 -8,250 -8,250 D 2,605 5,86,934 5,78,365 -8,569 -8,569 E 800 5,98,756 5,98,506 -250 -250 F 7,566 8,05,659 8,09,659 4,000 4,000 G 8,995 50,06,895 50,12,764 5,869 5,869 Total 1,69,0....