Futures and Options business income restricts use of presumptive taxation and triggers accounting and audit obligations.
Trading in Futures and Options constitutes business income, not capital gains; accordingly, taxpayers engaged in F&O must consider bookkeeping obligations, tax audit requirements and use of business return forms. Trades carried out on recognised exchanges that meet the explanatory conditions are not speculative. Turnover for F&O includes positive and negative differences, premiums on sold options and reversal differences. The author concludes that presumptive taxation is generally inappropriate for F&O trading because its application can produce anomalous results. (AI Summary)