Is Tax Audit applicable for Intraday/F&O Trading?

Income Tax Tax Audit
64

Thank you for the clarification and one more query if I am getting it right ! Do I mandatorily have to maintain book of accounts, balance sheets etc for the above condition?

65

Hi @Rohit_mohapatra

Yes, you are required to maintain books of accounts (including balance sheet) if you report regular business income in your ITR.

66

Thanks a ton shrutika

1 Like
67

hi, offline CA says we can file f&o under itr2 is it right

68

Hi @thiyagu53

As per the law, F&O is a non-speculative business income and hence ITR 3 needs to be filed.

69

I have salary income of 7lakhs and aslo F&O trading.
F&O turover is 60Lakhs
F&O loss of 17lakhs.
Is tax audit applicable?

70

Hi @deepthi_rai

If the Business turnover (Fn&O) is up to ā‚¹ 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.

You can read about Tax Audit Applicability : Help Center for your reference.

71

So I will not be liable for tax audit. right??
will I be able to carry forward the loss?

72

Hi @deepthi_rai

If youā€™ve satisfied the condition, you will not be liable for an audit.
Yes, you will be able to set off and carry forward the losses.

73

thank you @Shrutika_Shah

74

I have salary income of 12L and have last year - 2022-23 - FnO trading(my first attempt) loss of 18K with turnover of 46L. Is audit applicable to file ITR3 now or set of losses for future ITR3s?

Would appreciate clarification on this :pray:

PS: editted question with more details

75

Hi @Vineet_Sharma

You can proceed to e-file ITR 3 without a tax audit. You will be able to set off and carry forward the loss.

1 Like
76

Thanks for reply @Shrutika_Shah

But I am getting error - you have claimed income less than 8 of gross turnover. Please recheck your computation and applicability for audit if any u/s 44AB, 44AD(5).

Is it safe to proceed?

Also there seems to error in quicko. I generated my form 10-IE today(I had opted for new regime last year from old regime) but itā€™s unable to take my date as 14-July-2023. Is it okay if I keep acknowledgement number to be correct but add form fillling date as 31-Mar-2023?

ps: editted the question

77

Hi @Vineet_Sharma

This is a Category of defect B/D. This is just a warning message. You can ignore the same and continue to e-file your return.

If you opted for the new regime last year, and you are wanting to file in the new regime this year as well, then you are only required to enter the 10IE detail of the last year. Hereā€™s how to Opt-In/Opt-Out of New Regime : Help Center on Quicko.

Hope this helps.

1 Like
78

Hi ,

My F&O Turnover is ~38L and overall profit is 1.26 Lakhs which is less than 6% of turnover. It shows Tax Audit applicable as per the table and however there is an option to skip Tax Audit in Quicko. Is it mandatory to have tax audit completed and what will be the implications if I opt-out of Tax Audit and skip as per below link.

Also How a taxpayer can know the status of presumptive taxation scheme whether opted-in or not ?

For the above case , even if taxpayer has opted-in for presumptive taxation as per section 44AD , minimum of 6% profit of turnover (~2.3 Lakh) has to be shown as business profit though actual profit is only 1.26L, is that understanding correct ?

Please suggest how to proceed filing ITR.

Thanks

79

Hi @rhariram11

Audit applicability chart on Quicko is recommended assuming that you have opted into Presumptive Taxation Scheme in any of the previous financial years and opted out in any of the succeeding 5 assessment years.
If that is not the case, then you can opt out of Tax Audit (as it is not mandatory) and file your return. You can read more about Tax Audit Applicability: Help Center

If Tax Audit is applicable and you do not undergo the same, then AO can levy a penalty of the least of the following:
(a) 0.5% of Total Turnover, or
(b) INR 1,50,000/-

If a taxpayer has opted for the presumptive scheme in the previous year, it is mentioned in the ITR PDF This can be accessed by the taxpayer by logging into his e-filing portal account > e-File > Income Tax Returns> View Filed Returns.

In your case, if your turnover is less than 1 crore, and you have not opted out of the presumptive scheme previously, then you need not get an audit done.

Hope this helps.

80

Hi @Shrutika_Shah, please confirm audit applicability in below case:

  1. Turnover less than 64 L
  2. Loss of 10L
  3. Salary income 40L
  4. Never opted In/Out of presumptive income
    (Whether Assessee is declaring income only under section 44AE/44B/44BB/44AD/44ADA/44BBA/44BBB - NO)

Thank you for your help.

81

Hi @Santosh_Singh

Please read about the Tax Audit Applicability : Help Center.

You can also enter your financial situation on Quicko and Quicko shows the audit recommendation.

Hope this helps.

82

Thank you, i hope you are referring to below tool, which only shows until 2021-22.

Hence wanted to validate. My understanding is since i havenā€™t opted in/out of Presumptive scheme so i can file the return without tax audit. please confirm if my understanding is correct.

83

Hi @NTT_82

No, I am referring to a different article. The article shared by you shows until 201-22.

Please read about the Tax Audit Applicability: Help Center for FY 2022-23/AY 2023-24