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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Accounting and Taxation

A trader has these results for the year from non-speculative F&O trading: index futures profit Rs 3,00,000, stock options loss Rs 1,20,000, and the trader has Rs 50,000 of brokerage and other direct expenses on these trades. Ignoring turnover audit thresholds, what is the net non-speculative business income from F&O?

The net non-speculative business income is Rs 1,30,000. Futures profit of Rs 3,00,000 less the options loss of Rs 1,20,000 gives Rs 1,80,000, and deducting Rs 50,000 of expenses leaves Rs 1,30,000 as business income.

  1. ARs 1,30,000Correct
  2. BRs 1,80,000
  3. CRs 2,30,000
  4. DRs 3,00,000

Explanation

Net of profit and loss = 3,00,000 - 1,20,000 = Rs 1,80,000. Deducting expenses of Rs 50,000 gives Rs 1,30,000. Rs 1,80,000 omits the expenses; Rs 2,30,000 wrongly adds them.

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