Hey Hariharan,
The applicability of tax audit in case of F&O loss must be verified based on your turnover, number of transactions and the amount of loss.
I am a salaried individual with an income of 4 lakh and FnO losses of 3.4 lakh. Which ITR should I file and is tax audit applicable?
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Hey Dixita,
In your case, you need to file ITR-3 and show losses from F&O as business losses. Since your total income is more than 2,50,000 (Basic Exemption Limit) and you have losses, a tax audit will be applicable.
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I have traded 200 lots of usdinr and the turnover is above 2cr. I don’t have any income except for some amount I receive for giving tuition classes. My total income is not above 2.5 lakhs and I have net loss in my usdinr contracts. Do I need to file ITR and get audited?
Hey Dixita,
Yes, you are required to file ITR and get your books of accounts audited since your turnover is more than INR 2 crore and you have losses. You can carry forward the losses to the next 8 financial years by filing your ITR. This loss can be set off against your future profits.
Is there any penalty in case someone has trading activity but they have not filed ITR with audit?
Hey Sneha,
For FY 2018-19, the IT Department has started sending out emails under voluntary compliance scheme to the taxpayers who have done trading activity but not filed the Income Tax Return. The IT Department has started this campaign to provide an opportunity to taxpayers to validate the information and avoid tax notices.
If you have received such email, you need to login to your income tax e-filing account and validate the transactions on the e-compliance portal. If you validate such transactions, filing ITR is not mandatory.
However, it is always a good practice to file your ITR. In case the total income is less than the basic exemption limit you can file a Nil return.
I have total income including both trading and interest of 1.95 Lakhs. Will Tax Audit be applicable in this case?
Hey Sneha,
Tax Audit is not applicable when the total income is less than the basic exemption limit and the trading turnover is less than INR 1 Cr. So in your case, Tax Audit will not be applicable.
You can read more about Tax Audit on trading income on our Learn Center !
If my delivery based trading turnover is 3 crore but I have incurred a net loss. My intraday and F&O turnover are less than 50 lakhs with a profit of 275,000. Is the Tax Audit applicable?
Hey Hariharan,
Tax Audit as per Income Tax Act is required to be determined only if the equity delivery trading is treated as business income. Since the turnover for business income is less than 1 Cr and profit is less than 6% of turnover, tax audit would be applicable only if the total income from all sources is more than the basic exemption limit.
Read more about how to treat Sale of Shares as Capital Gains or Business Income on our Learn Center.
I am a full-time investor …No Salaried Income…in the financial year 2019—2020. I incurred a loss of around 4 lakh rupees…I only buy shares in delivery… That is the cash market. Non-speculative. Trading…my total income was a loss of rs 4 lakh. Turnover was less than 50 lakh.
So do I need to go for a TAX AUDIT?
Dixita
Hey Dixita,
Tax Audit is applicable in case:
- Losses from Business/Profession
- Profit is less than prescribed limits
- Turnover is more than the threshold
You can also check your tax audit applicability using the Determine Tax Audit Tool 
If my total income for FY 2020-2021 is zero. However, I have an F&O trading loss (Business Loss) of Rs 2,36,168 with sales turnover of Rs 1.5 Lakh and also, I have intraday trading loss (Speculation loss) of Rs 3,85,295.
In this case, do I need to get my income tax audited?
Hi @b500
In the above case since the total income is less than the basic exemption limit and turnover does not exceed the limit. Tax audit shall not be required.
Hello Quicko Team,
I am Salaried Individual. My Annual salary is greater than 250000.
I also do Intraday and F&O Trading. I have suffered following losses for FY 2020-2021:
Speculative (Intraday Trading Loss) : 15085
Turnover : 86537
Non-Speculative (F&O Trading Loss) : 65892
Turnover : 315918
Overall Loss is around 20% of total Turnover.
I have read various articles regarding Tax Audit but I am not sure about Tax Audit is required or not
Do I need to get Tax Audit done ?
Thanks in advance for your response.
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Since your income is greater than basic exemption limit of 2.5 lacs and you have incurred losses from trading, you will have to get a tax audit done.
Hope this helps.
In budget 2021 turnover limit for audit was increased to 10cr, is this limit applicable for FY 2020-2021?
Hi @d.r,
The increased limit for turnover to INR 10 crore announced in Budget 2021 will come into effect from AY 2021-22.
Does this mean if the turnover is about 9cr in FY 2020-2021 an audit is required?