Tax audit requirements for F&O trader

If the turnover in FnO is greater than 10cr, what are the pre-requisites of ITR3 filing? Also my 2nd question, I have a huge turnover but less profits, how do I save tax?

Hypothetical scenario: turnover more than 10cr and say 10 lakhs profit, in terms of percentage to turnover it is very less but to my Capital invested it is mostly 25%. I have plans to increase my Capital and there by turnover will also double, how to save tax as an individual or is there any hack to convert individual into Company?

Hey @Pradeep_Kumar_S,

F&O trading is considered business income and hence you will have to file ITR-3. If your turnover exceeds ₹10Cr you also need to get a Tax Audit done.

Moreover as you will be reporting your trading profits as business income, you can claim various expenses incurred with regard to trading as a deduction. As business income is taxed at slab rates, you can also claim Chapter VI-A deductions like 80C, 80D etc. if you have made the relevant investments. I am linking some threads that may help you:

List of Expenses a Trader can claim
How are profits from intraday and F&O trading taxed?