If your turnover is less than 10 crore and you have a loss of 21 lakhs, then a tax audit is not applicable to you assuming that the cash receipts or cash payments are less than 5% of the gross receipts or cash payments.
Hi
My question is i am salaried and having f&o losses of 9k with turnover of 17k is audit applicable on me
Hi @Vivek_Ray
An audit is not applicable considering the presumptive scheme is not opted out of and the cash receipts or cash payments are less than 5% of the gross receipts or cash payments.
@Shrutika_Shah I am confused. I’m in similar situation where I have made loss in F&O.
From what I’ve read from Income Tax website, audit is not applicable if chosing ITR3 (and not presumptive taxation) and turnover less than 10c, even if there is loss.
I’m using 10c because for F&O all the payments would be digital and not cash.
Hi @KapilS
Yes, your understanding seems to be correct.
If your FnO turnover is less than 10 crore, and you have a loss, a tax audit is not applicable provided that the cash receipts or cash payments are less than 5% of the gross receipts or cash payments and the presumptive scheme is not opted out of.
HI ,
I was trying to filed the ITR using quicko (integrated with zerodha) , it is showing tax audit applicable in recommendation audit tab .
Should i continue with filing ITR with quicko ?
You can proceed with filing your return by following the Steps to opt-in/opt-out of tax audit : Help Center on Quicko.
For expert assistance with your taxes, you can book a MEET.
Hi shurutika ,
Thanks for the reply.
In this case should i select No for tax audit opt and file the return ?
Thanks & Regards,
Ravi
If you do not wish to get an audit done, you can proceed by selecting No.
Make sure you’re complying with the rules. If an audit is applicable and you don’t get it done, you might receive a notice from the ITD.
Hello Shrutika,
I was filing for Income Tax with the help of Quicko. I was able to complete entire filing by use of your excellent filing system however got stuck due to Audit Issue and a bit confused reading your replies and Quicko automatic Audit recommendation. I need help with your suggestion on Audit. Below are the details for you to make right decision and help.
- My Gross Salary Income is INR 30.91 Lakhs
- This is first time I will be showing my F&O Income/loss and last FY I had filed ITR 1
- My F&O turnover and Income is as below:
|| Turnover Loss
|Broker 1| 6,050,809 | (696,360)|
|Broker 2| 1,521,324 | (429,294)|
|Total| 7,572,133 | (1,125,654)|
Hence I have a total F&O turnover of 75,72,133 & Loss of 11,25,654
Is Audit applicable if I file ITR3? As per above rules turnover is less than 10 crores and hence should not be however the Quicko automatic Audit recommendation states Audit is applicable.
Kindly help
My Gross salary is more than exemption limit , then also tax audit is not applicable ?
I have a turnover of 18 lakhs and a loss of 1.54 lakhs in F&O, do I need a tax audit?
My salaried income is less than 2.5 lakhs and turnover from F&O is 50lakhs and loss of 80000 in FY 22-23.
-
Is tax audit applicable ?
This is my first year trading in F&O. -
What if I don’t carry forward losses to next year. Do I still need to file ITR 3 and tax audit is applicable?
Hi @Darshan_Vaidya @Asingh @Rohit_mohapatra
Here’s a guide on Tax Audit applicability.
The Audit Applicability chart on Quicko is recommendatory. In case you want to want to opt out of Audit, here’s How to Opt-In/Opt-Out of Tax Audit.
Since there is no information about a person opting out of the presumptive scheme in the previous 5 years, which requires a tax audit, Quicko recommends the same in order to comply as much with the law.
Since you have FnO transactions in FY 22-23, you will be required to file ITR 3 as FnO is a non-speculative business income (irrespective of you opt for tax audit).
Thank you for the response but the article doesn’t clearly define about the tax applicability for the 1st year (for a beginner not the clause of presumptive) for turnover less than 1 Cr.
The article is a general article talking about tax audit applicability.
However, we take this suggestion into consideration and shall improve the article.
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“If the Business turnover is up to ₹ 1 crore, has profit from the Business of lower than 6% or 8% of turnover, has opted out of presumptive taxation scheme in the immediate 5 previous years AND total income is more than the basic exemption limit in ANY previous year then tax audit u/s 44AB(e) shall be applicable.”
What if the person is filing tax for the 1st time for F&O business and incurred a loss (is profit lower than 6-8% will be treated as loss)
Assuming you’re filing for the first time, and are opting for the regular scheme of taxation having a turnover of ₹50 lakhs and profit is less than 6%/8% (including loss) then an audit is recommended, though not mandatory.