25 July 2020
Hi I have made F&O Loss for the Financial year 2019-20. I don't want to set off or carry forward the loss -
1. Do I still need to show the loss in income tax filling? 2. Since I don't want to set off or carry forward the loss for future do I have to still go through Audit process.
26 July 2020
Yes, Barren Doe In any case you have to report losses in your Return of Income otherwise you may receive notices from the Income Tax Department in the future for non-compliance.
And as far as the audit is concerned if your turnover is less than Rs. 2 crores, you are eligible to declare income on a presumptive basis. In that situation, you are not required to go through the Audit process.
26 July 2020
Dear Barren
There is this notion among taxpayers to not report and carry forward a loss and not get an audit done. There is nothing wrong in Filing an audit report and carrying forward a loss as when government is a partner in profits then it's a partner in losses too.
Also, Sec 44AD has it's own issues like once you opt out, you cannot opt in for subsequent 5 years.
When you make profits in future from any business for the next 8 years,you will be able to set off these losses and not required to pay taxes to that extent.
Also, when you will no report your FNO transactions at all, it will again land you in notices from tax officials as correctly pointed out by Karan. And there can be bright chances of Penalty for not getting a tax Audit done which would be 0.1% of turnover of Rs.1,50,000 whichever is lower.
Regards
CA. Raj Doshi
raj@rcdco.in
www.rcdco.in
CAclubindia
