F & o loss, is audit compulsory ?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 May 2014
there is loss in futures and options Rs.150000 and turnover is less than Rs.1 Cr.
other income Rs.500000 short term capital gains on shares, interst income Rs.40000, tds deducted, tax paid on short term capital gains, but since F &O is considered as business income , is audit compulsory due to loss , but if i dont want to claim the benefit of loss , can i avoid for getting books of audited under section 44AD

kindly advice

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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01 May 2014 no audit is required in my opinion.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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01 May 2014 how have you computed the turnover? in F&O turnover is computed as sum of negative and positive cash flow on each contract on daily basis..if this turnover is less than 1 cr, no audit shall apply.

Querist : Anonymous

Querist : Anonymous (Querist)

02 May 2014 Thanks for your advise

turnover is less than 1 cr, but section 44AD says if profit is less than 8%, then audit is compulsory, please advise me considering the section 44AD

Nikhil Kaushik

Nikhil Kaushik (Expert)
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02 May 2014 yes...if you wish to claim less than 8% profit, audit shall apply if the total income is above exempted limit (which is true in your case)

Querist : Anonymous

Querist : Anonymous (Querist)

02 May 2014 there is actual loss of Rs.150000 as i mentioned, which is less than 8% of turnover. client does not prefer to go for audit and ready for not to claim set off of loss .

but is there any option not to claim loss and avoid audit.

or is it very much compulsory

Nikhil Kaushik

Nikhil Kaushik (Expert)
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02 May 2014 you still have to go for audit unless you offer 8% profit on the business income

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