During the Fin. Year 2008-2009 Sales amount in Shares is Rs.38,00,000/- & the Sales amount my other Proprietorship Retail Business is Rs. 31,50,000/- Should I go for Audit ? Is Section 44AB applies to get books of accounts Audit only in “Profit and gain of Business or Profession” if Turnover exceed Rs. 40,00,000/-.

Yes, you have to go for Audit u/s 44 AB

44AB applicable only when business income exceed of Rs. 40 lacs. In business income not include capital gain on sale of shares. hence in your case 44AB not applicable if profit of shares not a business income (derivative income or intra day trading).

Hi Vijay,

Sec 44AB, tax audit, is applicable when total turnover or gross receipts or sales exceeds Rs. 40L of that Person. so we shall see the limit on the basis of all the business carried on by the person, so in your case you have to get your books audited by a CA(sec 288).

I would suggest if you pay tax on your Retail business on the basis of sec 44AF then the remaining turnover of Share business will not be segregated with the retail business then you will not have to go for tax audit for any of the business.

Hope it will help you !! Further discussion will be greeted.

 sale of shares will be covered under capital gains and not PGBP and hence no tax aduit to be done.

Hi Devanshi,

I think when a companies business is to trade in share then then it will be computed under the head "Business and Profession" & not under "capital gain". Kindly let me know if I am wrong.

 see 1st of all let  me tell u that if a person income exceeds Rs 40,00,000 (from 1 or aggregate business) he has to get his books audited for business income from all business.Now if u have retail business u can opt for presumtive taxation only for retail business and not shares trading.However in such situation also u will have to get ur book audited. But ur income will not computed as per sec 28 for retail business.I am very much confident about it 

To decide whether the audit under sec 44AB is required we have to establish that the business income exceeds Rs.40 lacs. In the given case if the sale of shares is done in the trading capacity and is a business income than definately audit is required, but if the sale of shares income is taxable under the head Income from capital gains than audit under section 44AB is not applicable

 Mr Mishra!! In the previous year, how did you show the sale of shares - As capital Gains or as business income? If in previous year you have showed shares income as business income then in current year you will be liable for tax audit. If you showed it as capital gains, then you dont have applicablity for tax audit. For further details, I suggest u contact ur CA since, without knowing your case in full, it is not possible to determine if you are liable for Tax audit.

NO TAX AUDIT U/S 44AB, AS IT APPLY TO ONLY PGBP AND NOT TO INCOME FROM CAPITAL GAIN.