Applicability of Tax Audit in India

Hi @d.r,

The updated limit of INR 10 crore comes into effect from AY 2021-22 i.e. FY 2020-21. Have rectified the same in the previous answer. :sweat_smile:

Hi, I’m a student
For fy - 20-21
my tax slab is under 2.5lakhs
F and O turnover is 4.8crore
Loss from F and O is 50k,
total loss including expenses is around 2.5lakhs
Should I file IT Return?
If yes, is tax audit Applicable?
To carry forward my losses should I maintain books of accounts?

Hi @Akash,

To carry forward the losses, it is mandatory to file your Income Tax Return and report the losses before the due date.
Since your total taxable income is less than the basic exemption limit and the turnover is below the threshold of INR 5 crore for FY 2020-21, tax audit is not applicable.
You can use this tool to determine if a tax audit is applicable to you:

F&O trading is considered as a non-speculative business activity, therefore F&O losses can be carried forwarded to the next 8 years,

1 Like

“Not for Individuals having Turnover more than Rs. 5 Crore / trading entries more than 250.”
I wanted to buy ITR for equity Intraday and f&o plan
What does trading entries mean? Is it number of orders placed?

Hey @Akash,
Trading entries are the Number of Buy / Sell orders placed during the year.
If you can share your contact number or email id on this link or, one of our team members can get in touch with you for details, pricing and process. :slight_smile:

My total turn over in fno is 5 lakhs and profit 80k for 20-21. Is audit required? Is there anything specific to be done to opt for presumptive scheme or it’s just if criteria is fulfilled so i can file itr 4? Am salaried and salary income is 15lakh.

If I gift some amount to my mother and she earns profit in FnO with that money. Will the profit be clubbed with my income to pay tax?
She is housewife.

@Laxmi_Navlani @Divya_Singhvi @Kaushal_Soni @AkashJhaveri can you?

Hi @Ashutosh_Pandey

Tax Audit is not required since profit is more than 6% of Turnover and Turnover is not exceeding the ceiling limit of 10 crore. You can opt for the presumptive scheme and file ITR 4. Nothing specific required.

Gift to relative is exempt from Tax. Clubbing shall not apply on anything earned on gift money.

Thank you so much Mr akash

Hi Team,
I am a salaried person and i am filing my ITR from last 7 years.
I started trading from last financial year.

My question is, Is Tax audit is applicable for below case?

Salary - 9,00,000
option Trading -
loss - 2,29,000(2,9 Lakhs)
turnover - 1,70,00,000 (1,7 Cr)

loss - 8,850
turnover - 27,340

@Nireka @TeamQuicko could you plese help.
As i need paid CA assisted option here, if its applicable

@Alex, sure. If you can share your contact details on Quicko | Contact Us our team will get in touch with you to understand your income situation and suggest the applicable plan, process & discount for ITR filing :slight_smile:

for 2020-21 my intra day profit is 264, turn over 10857
stcg profit 17764
Can I claim expenses incurred for intraday trading as well as capital gain (other expenes, eg, share sell dp cost etc)
Am I required to maintain books and get them audited.
What should I do if I don’t want to neither maintain books nor get them audited

@AkashJhaveri @Divya_Singhvi @Laxmi_Navlani @Saad_C @Kaushal_Soni can you help with this?

Hi @sutharbkn

Intraday Trading has to be reported as Business Income and thus all the expenses can be claimed against business income.

No expense except Brokerage can be claimed in case of Capital Gains since it is not reported as Business Income.

No Tax Audit is required but preparing the books and filing ITR 3 is required as per the income situation mentioned.

Hope this helps!

Hi, I am a salaried person with income from salary close to 40 lakhs. I have income from house property, short term capital gains and income from other sources also. These income is around 2.5 lakhs.
I have also traded in F&O and made a loss of 2 lakhs with a turnover less than 1 cr.
I intend to carry forward my losses. Am I liable for tax audit


Hey @vinitraj3

You’re liable for a tax audit for the following reasons:

  1. Your income exceeds basic exemption limit (i.e., 2.5 lakhs), and
  2. You have incurred a loss on your F&O turnover.

Hope this helps :slight_smile:

@Sakshi_Shah1 can you help ?

If the turnover is upto INR 2 Cr, Tax Audit under Section 44AB is all the below conditions are satisfied:

  • Incurred loss or profit is less than 6% of turnover
  • Total income is more than basic exemption limit
  • Taxpayer has opted out of presumptive taxation scheme in any of the previous 5 financial years

In your case, since the total income is more than the basic exemption limit and you have incurred losses, we would recommend you should opt for a tax audit.

If you’re not falling under the third condition, based on the strict interpretation of Section 44AB, Tax Audit is not applicable. However, we recommend a tax audit on basis of the past notices issued by the tax department.

To read about this in detail, refer to the blog here - Tax Audit Applicability for Traders