Future and Option business and cloth business
This query is : Resolved
22 June 2023
If a person has 2 business 1st cloth business in which he avail 44AD his Turnover is less than 2 crore i.e 10 lakh and Profit is more than 8% i.e 1.2 lakh and another business is of F&O in which his turnover is 30 Lakhs and having loss of 3 Lakhs and he maintain book of account in case of F&O business did audit applicable?
22 June 2023
No. Tax audit based on turnover not applicable.
22 June 2023
Aggregate turnover is 40 lakhs, so tax audit not applicable u/s. 44AB(a) IT act.
26 June 2023
sir i am showing profit in cloth business but loss in F&O business however my total Turnover is 40 lakhs and has aggregate loss is 180000 ( 3 lakh loss-1.2 lakh profit) which is less than 8% profit even it is loss , still audit not applicable
26 June 2023
Had you opted for presumptive assessment u/s. 44AD IT act, in any preceding FIVE years, for any of these business?
26 June 2023
yes i opt 44AD last year for cloth business that time F&O did not commence
26 June 2023
In that case you need to declare minimum 6/8% profit in aggregate otherwise tax audit will apply u/s. 44AB(e) of IT act.
26 June 2023
did separate business not consider? we showing profit in cloth business in which we opt 44AD and showing loss in F&O business and mainting book of account for F&O business, in F&O did 44AB(a) not aplicable?
26 June 2023
No. Separation is not allowed as per rule, though practically it may be possible.
26 June 2023
Unless you declare 2.4L profit in F&O and 6/8% profit in cloth business, i.e around 3.20 lakhs in aggregate (no loss c/f of F&O), tax audit gets attracted.
26 June 2023
You are welcome.
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