Reg: audit requied for itr 4 filing
Querist : Anonymous
This is Vijay,
I had a speculation loss of 1.5Lacs,
should audit required for filing ITR-4.
I was a salaried employee with an income of 3.6 Lacs
Querist : Anonymous
75k was delivery loss and 75k was speculative loss
Querist : Anonymous
Gross Incomes = Purchase Value of Share minus Sale Value of Share
Is it right, is there any other meaning.
1. Is audit required for filing ITR-4 with speculation loss?
Speculation loss is considered a business loss under Income Tax.
Audit is required if:
Your turnover (total sales) from speculation business exceeds ₹1 crore (as per Sec 44AB).
Or if you opt for presumptive taxation under Section 44AD, audit is generally not required.
In your case:
You have only speculation loss of ₹1.5 lakhs, and you are a salaried employee with income of ₹3.6 lakhs.
If your total turnover from speculation transactions is less than ₹1 crore, audit is NOT required.
2. About ITR-4 and income type
ITR-4 (Sugam) is meant for presumptive income from business or profession.
If you have speculation business losses, you might need to file ITR-3 (for business income with losses), because speculation losses are considered business losses.
However, if your income is only salary + speculation loss and you are filing ITR-4 under presumptive scheme, losses cannot be claimed under presumptive scheme, because presumptive scheme doesn’t allow for losses.
So:
If you want to claim speculation loss, better to file ITR-3.
If you don't want to claim speculation loss (or don't have other business income), you can file ITR-1 or ITR-2 for salary income.
3. Meaning of Gross Income from speculation
The correct computation is:
Gross Turnover = Total Sale Consideration of shares/futures/options (not purchase value - sale value).
Speculation Income = Sale value – Purchase value.
Loss or profit is the difference between sale and purchase price of the shares or contracts.
Summary for you:
Since you had speculation loss of ₹1.5 lakhs, and salary income ₹3.6 lakhs,
Audit is NOT required unless your speculation turnover > ₹1 crore.
You should consider filing ITR-3 to report speculation loss properly.
Gross turnover is the sum of sale value, not purchase minus sale.
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