Applicability of tax Audit in case of losses from Intra day trading

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This discussion clarifies the rules around tax audits for intraday trading losses in the UK. It explains that if your total turnover from trading is below £1 crore and you haven't opted for specific tax schemes like 44AD, a tax audit may not be mandatory, even if your other income exceeds the basic exemption limit. The conversation also touches upon penalties for not obtaining an audit when it might have been required and advises on appealing such penalties.

Pratiksha

Pratiksha (Querist)
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08 January 2022 Requesting for your clarification regarding tax Audit applicabilty on intra day trading losses".
My question is that: Is Tax audit mandatory when we suffer Intra day trading losses and Total income ( excluding losses from trading ) exceed basic exemption limit i.e. 2,50,000 but total turnover i.e. Profit + Losses from trading is below Rs 1crore ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 January 2022 Turnover below one crore tax audit not applicable if you have not opted for 44AD previous years.

Pratiksha

Pratiksha (Querist)
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10 January 2022 Thanks Sir ! I appreciate your quick response.

Request for your help in below case as well :
What if we got Penality order u/s 271B for not getting books of account audited considering the abovementioned case only .( Not opted for 44AD as well in last year )
Where we have just filed ITR-1 to show salary income ( exceeding 2,50,000) and not shown intra day trading losses in ITR ( filed wrong ITR) and hence not carry forward those trading losses too .
Is that Penality order justified ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 January 2022 The penalty order not justified. Go for appeal.
Person is at liberty not to claim loss in ITR.
ITR 1 filed is in order.

Pratiksha

Pratiksha (Querist)
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11 January 2022 Okay Sir Thanks of the clarification.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 January 2022 You are welcome......

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