Tax Audit Applicability for F&O

Dear Team, I have below income please let me know the Tax Audit applicability

Salary 4.5 Lakhs

Hi @Vinay_Reddy, you can hop onto Quicko’s tax audit applicability calculator and input all your data there and understand whether a tax audit will be applicable or not.

Also you can refer to the following article to understand how tax audit applicability works.

My total Stocks, F&O turnover for FY 2020-21 is 6.05 Lakhs with P&L of 1.19 Lakhs(Loss) and my Gross total income(including F&O and Salary) is 3.14 Lakhs. Is tax audit applicable for me.

Hi @iam.p.sampath, please refer to the following answer.

Here is the tax audit applicability calculator and the article you can refer too,

Shall be glad to assist if you have any other queries. :blush:

@TeamQuicko @Quicko I have salary income of 11L and loses from FnO, my FnO turnover is 30L and loss is 93000, when i tried to file itr with quicko it said tax audit applicable, but it allows me to opt out of tax audit, so when quicko says that audit is applicable is it mandatory or will be better if available ? do i really need to get a tax audit, if so what will be the charges ?

and i also read from the same website (qna.tax), here Regarding ITR & Tax Audit for Salaried and F&O trading - #28 by nithin_h
If turnover is not exceeding 2 crores, Tax Audit is mandatory if tax payer fulfils all the below mentioned conditions:

The taxpayer has incurred a loss or the profit is less than 6% or 8% of Turnover / Sales and total income exceeds the basic exemption limit.
The taxpayer has opted for presumptive taxation scheme in any of the previous 5 years.

and i have not opted for presumptive taxation scheme in any of the previous 5 years, so i think i dont need tax audit is that correct ?

please advice as soon as possible. Thanks in advance.

Hi @suriya_kumar, please refer to the following answer to understand if there’s any audit applicability for you. If there are any further queries shall be glad to assist you. :blush:

Hi,

Please suggest if a tax audit is required or not as my loss is greater than 8% of the turnover in F&O trading.

Salary income > 10 lakhs
ASOS income (bank interest) = 50,000
Chapter VI A saving = 1 lakh

The F&O /Intraday detail is as follows.

Fin Year 20-21:

Short term profit = 1 lakh
Long term profit = 0

Intraday/ speculative profit = 8,000
Intraday turnover = 8,000

Futures profit = -10.75 lakh
Futures turnover = 20 lakh

Option profit = 75,000
Option turnover = 30lakh

Total F&O profit = -10 lakh
Total F&O turnover = 50 lakh

Kindly suggest:

  1. Whether tax Audit is required for filing the return? My loss is 20% of the turnover which is greater than 8% of turnover.

  2. Whether the Short term profit (1,00,000) be set off with F&O loss (- 10,00,000) during filing? Whether the intraday profit (8,000) be set off with an F&O loss of (- 10,00,000)?

  3. What are the charges for (a) tax audit and (b) return filing. And any other charges for filing?

Hi @K_S, you can use The Quicko calculator to know your tax audit applicability and can refer to this article to understand how tax audit works.
If there’s any further clarification you require please feel free to reach out. :blush:

Can I declare profit at 6% under 44ad for F&O trades to avoid audit, even if incurred loss in trades and also turnover is less than 1 cr.

Hi @Vj1289, you can use the Quicko Tax Audit applicability calculator to understand your personalised situation and how you should optimize it.

You can also refer to the following article to understand how tax audit applicability works.
If there’s any other clarification required, shall be glad to help. :blush:

Hi Yash,

The tool is not moving to the final step: the result. Can you please with this?

I am having taxable salary of 4.9L .
I am having losses around 1.5L from F&O
Do i need to go for tax audit ?
If, so can you help me in this regard

Hey @K_S, we are taking a look at it, and we’ll update here as soon as the error has been rectified.

Hi @Lokesh_Sai_Kumar, you can refer to the previous answers and check how tax audit applicability works. If there’s anything else that you need help with, would love to help. :blush:

Here’s a screenshot. It is not moving to the results page after clicking next.

1 Like

Hi @K_S, thank you for bringing this to our notice. We are fixing that tool at the moment and will update it here as soon as we are done. Till that time you can also refer to the this table to understand your tax audit applicability.

Income from Business

Turnover Profit >= 6% Profit < 6% (Including Loss) Cash Payments > 5% Cash Receipts > 5%
Upto 25 Lakhs Not Applicable Applicable Not Applicable Not Applicable
25 Lakhs to 1 Cr Not Applicable Applicable Not Applicable Not Applicable
1 Cr to 2 Cr Not Applicable Applicable Applicable Applicable
2 Cr to 10 Cr Not Applicable Not Applicable Applicable Applicable
Above 10 Cr Applicable Applicable Applicable Applicable

Income from Profession

Turnover Profit >= 50% Profit < 50% (Including Loss)
Below 1.5 Lakhs Not Applicable Applicable
1.5 Lakhs to 50 Lakhs Not Applicable Applicable
Above 50 Lakhs Applicable Applicable

Team, this table is obvious but if I used section 44AD presumptive income for last 3 years and from now on I do NOT want to use it hence want to come out of the presumptive income section going forward, can I still avoid audit as long as my turnover is between 2 crores and 9 crores ?? Please confirm this.

1 CA said that I need to necessarily use 44AD for 6 years before coming out hence I need tax audit. Please clarify if this correct ?? If this is correct, your above table does not cover this scenario. Also, ur tax audit tool is not working even now.

Regards

hi,
I have some loss in f&o,
but I want to show it as minor profit and my all total income is also below 2.5L, so i will not required audit, right?

can I show it as profit instead of loss ?

@Yash_Kaviya @TeamQuicko @Nireka @Maharshi_Shah pls reply ASAP

Hi @kp3, you should be reporting trades as per actual transactions. It is not recommended that you change the details of the trade.

yes, but just want to know legally its allowed or not?
is there any provision that doesn’t allow to report less loss(especially for trading)?

@Yash_Kaviya can you answer?