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
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:
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Income Tax Return is filed on or before the due date (July 31 of relevant AY) and,
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Turnover is up to 10 crore and,
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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.
- Should I get my accounts audited ? What is the benchmark to get the books audited
- 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!
but in this blog its different please can you check
Hi @123_Indian,
As the turnover is below ₹1Cr and the total income is below the basic exemption limit, a tax audit will not be applicable. The same is mentioned in the article as well. Kindly let us know if you require any further clarification.
Hope this helps!
1 Like
Sorry for the delayed question Just wanted to point out this from your blog. Please check under Turnover is up to 1 crore section, probably an edit is required there.
Hey @123_Indian,
In case of business turnover of less than ₹1Cr, an audit is required when you have opted out of the presumptive taxation scheme in any of the previous 5 FYs. The same has been mentioned in the article as well.
Hope this clarifies!
Dear sir,Madam,
Sub :- Applicability Of TAX AUDIT.
Share Trading Is My Only Income + Dividends From Shares I hold,and some Intra-day Trades.
( I Do Not Do Any Futures N Options )
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My Turnover Is Limited To Less then 10 Crores.
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I Book Profits at 2% To 4%( Maximum ).
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My Income Is Above Taxable Limits.
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I File Incometax Returns as A Business Income Using ITR Form No 3.
Am I Liable To Any TAX AUDIT…???
Please Give a Clear Answer…
Thanks
Tushar Arvind mody
Hey Tushar,
In case of trading income where 100% of the transactions are digital, a tax audit is applicable when your turnover crosses 10 crores. Hence, if your turnover is below the limit, a tax audit is not mandatory.
To
Surbhi Pal,
Thank you…so much for this clear Reply…
This will Allow me to Trade with a Clear Mind…
Keeping The Turnover Limit in Mind…
Till I Decide To Do More Business Exceeding the Turnover Of Ten Crores and Going in For a Tax Audit…
Thanks Again
Tushar Arvind mody
1 Like
Hi,
If in PY Turnover exceeds 2cr but not more than 10cr, and all cash payments and Receipts are below 5%.But earlier I have opted for Presumptive scheme under sec 44AD for only three consecutive years and now as turn over exceeds 2 Crores but less than 10 Crores this year being the fourth consecutive year after opting for presumptive tax scheme, I cannot file under presumptive tax Scheme.
Can I file ITR 3 without an audit of accounts ?
Hey @Udayraj_Yadav,
One has to go for a tax audit if they opt out of the presumptive taxation scheme before 5 years. Hence, in your case, you’ll be liable for a tax audit.
Thank you for your prompt reply, my second querry is that, my wife has consecutively filed more than 5 ITRs opting for presumptive scheme under 44AD but in FY23-24, she has incurred business loss of Rs 40 Lakhs approx and her turnover is approx Rs1.15 Crores, so this will be first year in so many years that she has to opt out of presumptive taxation sheme as her loss is approx Rs 40 lakhs, can she file ITR 3 without Tax audit or Tax audit will be required in her case ?
Hey @Udayraj_Yadav,
Tax Audit is mandatory if someone opts out of 44AD before 5 years. As in your case 5 years are already completed, tax audit will not be mandatory.
However, it also depends on the type of business. The turnover limit for tax audit is ₹1Cr if more than 5% of business transactions are in cash and ₹10Cr if less than 5% of the transactions are in cash.
If I have a turnover of 1 crore by combining profit of 75 lakhs and loss of 25 lakhs in F&O, which means 50 lakhs gross profit. Can I show only 6 lakhs as income under presumptive taxation ?