Tax Audit u/s 44AB: Is it applicable to you?

Can i claim future and option loss without audit if my turnover is

a) more than 1 crore
b) more than 2 crore
c) more than 10 crore

Is it required to maintain books of accounts in any of these three cases

Hi @Ashish_Lunawat

Yes, we do recommend maintaining books of accounts if you trade in futures & options since for a trading business, most of the details are provided by the broker.

Yes, losses can be carried forward without tax audit if:

  • Income Tax Return is filed on or before the due date (July 31 of relevant AY) and,

  • Turnover is up to 10 crore and,

  • Not violated the conditions of Section 44AD in any of the previous 5 years.

However, if the turnover is more than 10 crore, tax audit is mandatory as per section 44AB(A) not only to carry forward losses but even if you have profits a tax audit by a CA will be mandatory.

Hope this helps.

My c.a. says : irrespective of any scenario ; if one wants to carryforward the current year loss ; audit is manadatory !

Hi @HIREiN

Professionals may differ on Applicability of Tax Audit. We recommend no tax audit is applicable if:

  • Income Tax Return is filed on or before the due date.
  • Turnover is up to 10 crore and,
  • Not violated the conditions of Section 44AD in any of the previous 5 financial years.

You can always a take a second opinion of your CA for applicability of Tax Audit.

Thank you.

I have done stock trades (equity) on daily basis (delivery and intraday both). My absolute turnover is around 3cr and I don’t have a single trade in the FnO segment.

  1. Should I get my accounts audited ? What is the benchmark to get the books audited
  2. How to calculate my tax? Is this my business income or taxed as short term capital gain?

Hey @Swatantra_Kumar,

Intraday trading is considered business income and in the case of business income, a tax audit becomes mandatory when the turnover exceeds ₹10Cr.

Apart from intraday, if the holding period is less than 12 months, the gains will be treated as short-term and if the holding period is more than 12 months, the gains will be long-term gains.

Hope this helps!

Wheather tax Audit is required if Income is less than 2.5L, LTCG is 41.25 Rs, STCG is 6697 Rs, F&O PNL is 182 Rs with a Turnover of 3874 rs, since profit is less than 8 % of turnover do we need to do tax audit for this?

Hey @123_Indian,

As the turnover is below ₹1Cr, a tax audit will not be applicable.

Hope this helps!