LIVE GST Audit Course by CA Sachin Jain. Register Now!!

is tax audit compulsory in following tyhe case?

Prasanna (practice) (177 Points)

24 July 2010

a person has earned Rs. 2 lacs from F&O transaction in shares (22 lacs and 24 profit resulting in net profit of Rs.. 2 lacs) and Rs. 5 lacs in cash. IN this case, is the tax audit prescribed u/s 44AB of the income tax act is applicable?

Reply
Follow
Share

2 Replies

Sangeet Lodha (article) (65 Points)
Replied 24 July 2010

Dear Prasanna,

Tax audit prescribed u/s 44AB would not be applicable, as F&O turnover is not covered under the tern “Gross Turnover”. Moreover, I think tax audit prescribed u/s 44AB would be applicable if the turnover would have crossed 40 lacs, as the section provides the amount of gross receipts and NOT the amount of profit earned as the threshold for applicability of tax audit.....In your question as the amount does not cross 40 lacs, tax audit is not applicable..