Tax audit u/s 44AB: Who is it applicable to?

Income Tax Tax Audit
41

I have freelance income 2.37 lacs.

FNO TURNOVER : 3.43 Lacs
FNO LOSS : 96.75 Thousands

Does Audit is applicable ? How does 50% profit rules applied here ?

Do we need to consider 1 crore as turnover or 50 lacs for FNO turnover ?

42

Hi @Private,

Your F&O income will be reported as business income and as the turnover is below ₹10Cr, audit will not be applicable.

This is for professional income. If you are reporting your freelance income as professional income and claiming more than 50% expenses, then a tax audit will be applicable.

However, if your total income for the year is below the basic exemption limit of ₹3L (under the new regime), then a tax audit will not be mandatory.

43

I haven’t filed ITR. So it will consider as old regime right ? income is below 2.5 lacs.

I work from home so there are no expense but I had FNO loss.

thats why I am confused about audit.

44

Hi @Private,

If you haven’t filed your ITR yet, you’ll have to file a belated return. As the new regime is default, your return will be filed under the new regime. You’ll not be able to opt for the old regime now.

45

Tax audit mandatory for turnover

46

Hello @Hopcom

As per Section 44AB, tax audit is mandatory if your turnover is more than 1 crore. However, to incentivize digital transactions, the limit of turnover has been extended to 10 crores if 95% of the total receipts and payments are made digitally.

Hope, this helps.