ilmscore | Prediction Details
"total of favorable and unfavorable and what is what else is to be done for options is that premium received on sale of options is also to be included in turnover so this point plus this point together is going to be treated as the turnover so for better understanding let's take an example and to begin with we will take an example of a call seller. So assume you are a call seller and you have sold call option of 15 000 strike price of course I am sure if you have done uh transactions and features and options everyone knows that if you're a call seller you must have received a premium for that and premium is 300 rupees right so now let's understand based on a case study what happens on expiry date. Assume that on expiry date it closes at 16 thousand market closes at sixteen thousand so this went against your trade and this went in the favor of call buyer so is the call buyer going to execute that? Answer is Yes and you will have to face a gross loss of thousand rupees right but then what would be the net loss see gross loss was thousand you received a premium of 300 so your net loss will be only 700 rupees but then again comes the absolute figure so absolute figure is basically the mod value what do we mean by mod value we have to remove the plus or minus sign whatever so absolute loss in this case will be only 700 rupees right but that's an absolute figure what will be the turnover now again for that let's go back to the guidance note total of favorable and unfavorable and what is what else is to be included premium received will also be included so this 700 plus premium received in total the total turnover will be 1000 rupees"
By CA Rachana Phadke Ranade | July 20, 2022 | Pending
From video
Tax Audit Applicability on F&O | CA Rachana Ranade 00:08:43 - 00:10:27
Interpreted Prediction
For a call seller, the turnover is calculated as the sum of the absolute net profit/loss and the premium received. For example, if there's a net loss of 700 (after receiving 300 premium), the turnover is 700 (absolute loss) + 300 (premium) = 1000.

Prediction Details

Topic
Turnover Calculation for Options (Call Seller)

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