AUDIT FOR INTRA DAY SHARE TRADING

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This discussion clarifies tax audit requirements for salaried individuals engaging in intraday share trading. It addresses whether a single, small intraday profit, even if below 6%, necessitates a tax audit when total income exceeds the basic exemption limit. The consensus is that for such minimal transactions, a tax audit is generally not applicable, and filing under ITR 1 is sufficient. The thread also confirms that delivery-based share trading does not typically trigger mandatory tax audit obligations for salaried individuals.

Student

Student (Querist)
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13 September 2023 Dear Sir,
My question is suppose I am salaried person and my income is above the exemption limit of Rs.2.5 Lakh and suppose during the full financial year If I have done only one intra day trading and suppose the profit is less than 6 % then do I come to Tax Audit although the turnover is very low. I ask with the following example.
Suppose I purchase the 500 share of Indian Oil @ Rs.100 and sold intraday @ Rs.100.10 so my profit will be Rs.50/- this income will be clubbed into my income @ applicable tax slab. Now during full financial year I have done this transaction only then do I have to undergo tax audit as my taxable income is above exemption limit say Rs. 14 Lakh from salary ??

as I have heard that If profit from Intraday Trading is declared less than 6% and Total Income exceeds Basic Exemption Limit When these 2 conditions are satisfied, Tax Audit will be applicable Is this true ? If this is true then I should avoid intra day as it attracts tax audit.
Please reply at the earliest.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 September 2023 Ignore such a small transaction in filing ITR. File ITR 1. Tax audit not applicable for such small transaction.
Avoid intra day trading.

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Student

Student (Querist)
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14 September 2023 Thank you sir for your reply. Is there any Tax Audit obligation for individual doing only delivery based share trading. I mean any limit for such audit is mandatory for service class individual doing job ? Pl reply sir.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 September 2023 Tax audit not applicable for delivery based trading.

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