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

Income Tax Tax Audit
84

I am salaried person with 5lakh salary and I have turnover of 27.5 lakhs and Loss is of 3.6 lakh . Is audit required ?

85

Hi @tarun_kumar

If your 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.

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

86

Hi Team

I do have salary income of 15,00,00 and also im doing trading of F&O and the turnover is below 1 core and loss is 1,00,000… Please can you clarify tax audit is applicable or not and also which ITR i need to fill up

87

Hi @venky_venkatesh

If your 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.

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

Since you have F&O income along with salary income, you must file ITR 3. You will also be able to set off and carry forward the F&O losses to future years if you file your ITR on or before the due date.

88

But if the matrix of tax audit ( - upto 25 lacs ) is referred then audit is reqd , no ? Since the profit ( including ) is less than 6 % of F & O Turnover

89

FY 22-23
My salary was nil .
In Intraday Intraday/Speculative profit was -17395.03 ( loss )
Short Term profit was + 53554.2 ( profit )
F & O Turnover was 2.93 L and loss was -64K .
Presumptive tax scheme was not opted in the previous years and there are carry forward losses from FY 21-22 .
Kindly let me know if tax audit is applicable ?

90

If the table below is referred then tax audit is required , no ?

In case of Regular Business Income

Turnover is up to 1 Crore

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.

91

Hi @T_R

A tax audit is not applicable to you in the income situation mentioned by you as the turnover is less 10 crore and you have not opted out of the presumptive scheme.

Also, you must file ITR 3 in this case.

1 Like
92

There is another case for my mother wherein -
FY 22-23
1.There is a pension income of 3 .18 Lakhs /annum (Gross ) i.e. before exemptions /std deductions .Income chargeable net of std deductions - 2.68 Lakhs
2.Intraday/Speculative profit - 2 Lakhs ( Loss )
3.Short Term profit - 1 Lakh ( Loss )
4. F & O Turnover was 7.70 Lakhs and loss was - 6.6 K
Carry forward losses from FY 21-22 is 67 K
Pl. let me know if
Tax audit is required ? In case tax audit is not required if still the returns has to be mandatorily filed by a CA ?

93

Hi @T_R

A tax audit is not applicable to you in the income situation mentioned by you as the turnover is less than 10 crore and you have not opted out of the presumptive scheme.

Also, you must file ITR 3 in this case. The return can be filed by you, not necessary to be filed by a CA.

1 Like
94

How to calculate F & O turnover ?

95

Hi.

Please guide w.r.t. tax audit applicability in following scenario.

A person has following income during FY 2022-23:

  1. Salary Income = 10 lakhs
  2. 44ADA Professional Turnover = 10 lakhs ; Income u/s 44ADA = 5 lakhs
  3. LTCG = 1.50 lakhs
  4. STCG = 1.50 lakh
  5. Interest & Dividend Income = 1 lakh
  6. Options Turnover = 25 lakhs ; Options Loss = 7 lakhs (First time trader so no question of 44AD Presumptive Scheme in previous years).

Is tax audit mandatory in above case or filing in ITR-3 would be sufficient? Kindly advise.

Thanks & Regards.

96

Hi @Bavliya

Here’s a read about Trading Turnover Calculation for Trading Income - Learn by Quicko

97

Hi @Piyush

A tax audit is not applicable to you in the income situation mentioned by you as the turnover is less than 10 crore and you have not opted out of the presumptive scheme.

You can just file ITR 3 that’s enough.

1 Like
98

Thanks for your response. Another query please.

  1. When does the criteria of total income exceeding basic exemption limit come into play for tax audit?
    Is it only when someone opts out of presumptive scheme under 44AD?

  2. Total income in above point means only F&O business income or income under all heads taken together?

Thanks in advance.

99

Hi @Piyush

  1. Yes, when you opt out of the presumptive scheme the total income criteria comes into play.
  2. Total income includes incomes from all the heads.
1 Like
100

Madam

I am not salaried person. last year deposited 6.5 Lakhs( land sale) in bank for trading.I have turnover of 24.17 lakhs and Loss is of 3.6 lakh. Is audit required ?

101

Hi @Madhu

A tax audit is not required to you in the income situation mentioned by you as the turnover is less than 10 crore and you have not opted out of the presumptive scheme.

Also, you must file ITR 3 if you have losses from intraday or F&O trading.

102

Madam can we file f&o carry forward losses in new tax regime

103

Hi @Madhu

Yes, you can set off and carry forward F&O losses in the new regime as well.