Rule number or sec number for calculation of F&O turnover for Income tax.
Do any one knows the exact rule number (or section number or provision number) for calculation of futures and options turnover for the purpose of Income tax.My father traded in MCX and his derivative turnover is 8 crores but I saw from many sources on the internet that turnover is calculated on the basis of daily differences or trade to trade differences.If that is the case his turnover is less than 2 lakhs. Problem is an income tax notice which he received for this.IT department people saying that turnover is 8 crores.They are also saying that we have to pay huge penalty.Here his income is less than 250000 which is basic limit.I need to prove that his turnover is around 2 lakhs to which I should show the section for it.Please help.What is the reference material i need to submit to IT officials to prove my turnover is below 1 crore when calculated on the basis of daily or trade to trade differences.
There is Guidance note from ICAI on this which will help you determine the turnover. http://www.caalley.com/gn/30357dtc19988.pdf .. The Link will be usefull so as to explain the Assessing officer. Do consul a good Auditor who can help in representation before authorities.