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Thank you.
My trading income is ~12% of my FnO turnover(that is less than 2Cr), and am a salaried resident individual. I do understand from this post that tax audit is not required in my case.
I wanted to understand would presumptive taxation scheme be better for me, and being a salaried person am I even eligible to opt for it? Thanks in advance!
Hey @Saurabh1,
If you have a business turnover of less than ₹3cr, you can opt for the presumptive taxation scheme.
However, once you opt-in you will have to continue with the same scheme for the upcoming 5 years. In case you opt out of the presumptive taxation scheme, you will have to get your books of accounts audited for the next 5 FYs.
Hope this helps!
Hi,
So I have a few different sources of income:
Freelance income ( I use presumptive under Section 44AD to file taxes for this - Bulk of my earnings) - Have used the same in the past few years.
Normal stock capital gains (short term and long term - decent chunk but less than freelance income)
Intraday trading (speculative - a small profit - couple of trades)
FnO trading (couple of trades - loss) - FIRST Time FnO trading, no previous ITR with FnO.
All this comes out way less than 1 crore. Do I need tax audit just because of that FnO loss?
Thanks in advance!
Hey @gaurav23,
In case of stock trading business where 100% of the transactions are digital, the turnover limit for a tax audit is ₹10 Cr. Hence, if your turnover from F&O trading does not exceed this limit, it is not mandatory for you to get a tax audit.
Hope this helps!
Thanks Surbhi!
So, neither my use of Section 44AD for the freelance income nor the showing of FnO loss in ITR3 necessitate the audit as my FnO turnover is way below the 10cr limit.
Yes, your understanding is correct.
I have salaried income of 13 lakhs. FnO turnover of 7 lakhs and loss of 1.9 lakhs. I do not need to have tax audit right? this is my first time FnO trading and filing itr3. all are digital transactions through Zerodha.
@CA_Niyati_Mistry @AkashJhaveri @Shrutika_Shah @Muskan_Balar
If a salaried employee (salary say 30 lacs) and invest in stocks. Sold shares worth 80 lacs (delivery). STCG= 13 Lacs & LTCG= 14 Lacs.
Please advise an efficient way to reduce tax ie. opening llp/company etc.
Also is GST registration required in the above case as delivery turnover is 80 lacs?
Hey @Sambit_Pradhan,
As the turnover is less than ₹10Cr, a tax audit will not be mandatory.
Hey @Quant_Cr,
No, as these are capital gains, no GST registration will be required.
Here’s a thread that may help you: Can I set up an LLP for trading?
I have got a turnover of 1lakh and loss of 20k each on intraday trading and f&o trading.
In which line items of itr-3 should I put the loss and expenses for each of intraday and f&o trading. Please help.
Hi @Kaushal_Jain,
You’ll have to report both of these as business income while filing ITR-3. F&O trading turnover and profits need to be reported under non-speculate business and intraday will be reported under speculative business.
You’ll also have to fill in your financial statements (balance sheet and P&L) and you can report your trading expenses under your P&L statement.
Hi,
I was filing return under 44AD till last assessment year. This assessment year his F&O turnover exceeds 3 crore but is within limits of 10 crore (44ab)
Now the query is 44AD(4) says audit applicable if 44AD(1) not followed. But my view is client wants to follow, but is unable to cz of turnover limit. So technically i am not violating section 44AD(1) and 44AD(4). it is just that i become ineligible business.
So will tax audit still be applicable?
Hi @Bharat_Bhansali,
There are mixed views on this one. Your point is absolutely valid and this entirely depends on how the sections are being interpreted. In such cases, it is better to take the safer route and get the tax audit done.
You can always consult a professional for personalized advise.