Tax audit and quicko tool

I have an salary of 10 lacs pa and have also started trading. The data mentioned is for FY 2019-2020
Intraday profit : 85.5k
Intraday turnover : 1.4L
Short term realized profit : -72.78k
Total charges : 31.17k
Other credits/debits : -2.43k
Net Realized P&L : -20867.92

  1. Do I need to get the tax audited?
  2. Does quicko have a provision for tax audit?
  3. When I had used quicko tool , it showed that I had tax dues of 20k after the importing the trade statements from zerodha. Can’t the loss be carried forward to the next year? How is it arriving at 20K?

Hi Sakshi,

Tax Audit is applicable when:

  • Turnover is above the threshold
  • Profit is less than 6% of the turnover

You can use this tool to determine if tax audit is applicable to you or not. Learn more about tax audit of trading income here.

Quicko is an online tax filing platform. However, when our customers have audit requirements, we connect them with Chartered Accountants who could conduct tax audit if they need.

Intraday is treated as speculative business income. Your Short Term capital losses cannot be set off against business income. Hence the tax liability calculated would be on your Intraday profits. Learn more about Set off and carry forward losses here.

Hope this helps :slight_smile:

Afters hours of research found this.

1.If you are a Fno trader classifying this income under business for a salaried person. The limit has been increased to 10Cr provided you don’t make any cash transactions >=5%.

Only turnover more than 10cr you will need an audit(should not have opted for sec 44ad presumptive tax scheme for last 5 years).

  1. If you have opted for presumptive tax scheme you need to show the profit of 6%(since we are presuming the income and paying tax only on this income at fixed percentage).

In this case you make a loss then you have to go for audit - also the turnover should be less than 2Cr - here the audit is applicable.

  1. Also that your net income if is more than 2.5 LPA and you opted for presumptive tax scheme then audit is applicable.

  2. If your net income is more than 2.5LPA but you have not opted for presumptive scheme and have incurred loss then just file ITR-3 - NO need for audit until 10Cr limit. You can carry forward and set off losses.

The only catch here is don’t opt for the 44AD until you make 6-8% returns on fno for 5 years consistently.

If you make a loss the next year and turnover is less than 2 cr then you have to get the audit done.

For business income less than 400cr the tax are also less. So don’t fall in trap of 44d if you are making losses.

Is this correct?