This is a common question amongst stock market traders, let me try to break it down in this thread.
See like any other business, people who engage in intraday or F&O trading might have to go for a tax audit. However, this depends on a few criteria.
For starters, a tax audit is review of the books of accounts by a Chartered Accountant (CA) to verify its accuracy and compliance with income tax laws.
Now the primary factor to determine audit applicability for traders is their turnover.
For any business, a tax audit is required once turnover crosses ₹1 crore in a year. This limit goes up to ₹10 crore if your cash receipts and cash payments are each 5% or less of the total. Since intraday and F&O trades settle through your broker and bank, most traders easily meet this condition, so ₹10 crore is usually the number that matters for them.
You can refer to the table below.
You see, tax audit rules can get technical. You can use our Tax Audit Applicability Calculator to quickly check if tax audit applies to you.
For example, if you’re a full-time trader and your F&O turnover is ₹11.5 crores, you are required to get your books of accounts audited, as it exceeds the ₹10 crore threshold.
We’ve broken down how to calculate audit turnover for F&O traders in this video.
Apart from trading turnover, there is another reason you might have to conduct a tax audit i.e. presumptive taxation.
One thing worth knowing upfront: F&O trading and intraday trading aren’t treated the same way when it comes to presumptive taxation. F&O is a non-speculative business, so it can use the presumptive scheme below. Intraday trading is treated as speculative business, and in practice, it isn’t eligible for this scheme, even though the tax return utility itself is what enforces this. So the presumptive route below applies to F&O traders, not intraday traders.
Audit applicability for business declared under the presumptive taxation scheme
Presumptive taxation lets small businesses pay tax on a flat percentage of turnover, instead of maintaining full books and getting audited. For F&O trading, you can use this if your turnover is ₹2 crore or less (₹3 crore if your cash dealings are 5% or less of the total).
This is a separate limit from the audit threshold above, and it’s easy to mix the two up. Crossing ₹2 crore (or ₹3 crore) just means you can’t use the presumptive scheme anymore, not that you automatically need an audit. Whether you need an audit still comes down to the ₹1 crore / ₹10 crore rule.
Audit only becomes mandatory here in one specific case: if you’d used the presumptive scheme before, and now declare a profit lower than the scheme expects, and your total income is above the basic exemption limit. If your income is below that limit, you’re off the hook even then.
Once you’ve determined that a tax audit is required for your trading business, make sure to file the audit report by 30th September and submit your ITR by 31st October of the respective assessment year.
For FY 2025-26, the ITR deadline is 31st July if you don’t have business income, and 31st August if you do but don’t need an audit. If you’re required to get audited, your deadline moves to 31st October. Getting an audit done voluntarily, when you’re not actually required to, doesn’t shift your deadline anymore, so don’t count on that to buy extra time.
Here’s a video that answers everything about tax audits.
? I mean it’s just one trade that too a very small amount. Can I file without having it audited?
for your answers and patience