Requirement for tax audit for F&O traders with business loss to be carried forwarded

Income Tax Income from Business or Profession
1

Hi,

I have a turnover of between 50L to 1Cr with an F&O trading loss of around 10L that I wish to carry forward for future years. This is the first time, I will be filing ITR3 and do not have any other business, so presumptive taxation does not apply to me. Do I have to get a tax audit mandatorily?

Also, since I do not have another business and do not wish to continue F&O trading, can I offset the carried forward F&O losses with any other income such as equity dividends, equity capital gains, interest income, etc. in the future years?

2

Hey @abhi06,

In the case of businesses where more than 95% of the transactions are cashless, the turnover limit for a tax audit is ₹10Cr.

Hence, for F/O trading where 100% of the transactions are digital, a tax audit is mandatory only when your turnover exceeds ₹10Cr.

Moreover, in the current year, F/O losses can be set-off against all incomes except salary. However, once such losses are carried forward, they can only be set-off against other business incomes in the subsequent years.