REQUIREMENT FOR AUDITBEFORE FILING ITR FOR FY 2020-2021.

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This discussion clarifies the audit requirements for filing an Income Tax Return (ITR) for the financial year 2020-2021, specifically for senior citizens with pension and share trading income. Initially, there was confusion regarding whether a share trading turnover below ₹1 crore, coupled with other income that becomes non-taxable after deductions and rebates, necessitates a tax audit. The consensus reached is that if the total income, after all eligible deductions and rebates (like Section 87A, 80C, 80TTB, 80D, and standard deduction), is not taxable, then a tax audit is not required, even with a significant share trading turnover below the ₹1 crore threshold.

v ramachandran

v ramachandran (Querist)
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03 January 2021 SIR
I AM A SENIOR CITIZEN HAVING PENSION INCOME OF RS 3.50 LAKHS. I HAVE DONE SHARE TRADING WITH A TURNOVER OF 85 LAKHS AND A PROIFT OF RS 1.30 LAKHS UNDER SHARES ( BUSINESS INCOME). I HAVE ALOSS OF EARLIER YEAR OF RS 65000/- WHICH WILL BE OFFSET BY THIS YEARS PROFIT. AM I REQUIRED TO HAVE MY ACCOUNTS AUDITED IN SPITE OF THE SHARE TURNOVER BEING ONLY 85 LAKHS. OTHER INCOME EXCEEDS INCOME TAX LIMIT. PLEASE ADVISE.
V RAMACHANDRAN. COIMBATORE

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 January 2021 Tax audit applicable and books of accounts need to be maintained as you are having taxable income and reporting less profit.

v ramachandran

v ramachandran (Querist)
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13 February 2021 SIR, IN ANOTHER CLARIFICATION YOU HAVE STATED THAT AUDIT FOR SHARE TRADING IS REQUIRED ONLY WHEN THE TURNOVER EXCEEDS 1 CRORE. THE ABOVE CLARIFICATION IS A BIT CONFUSING. MY OTHER INCOME IS NOT TAXABLE AFTER ELIGIBLE DEDUCTIONS AND APPLYING SEC 87 A - (rebate). THE SHARE TRADING TURNOVER FOR FY 202-2021 IS 98 LAKHS. IS AUDIT REQUIRED OR NOT.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 February 2021 You have income above 2.50 lacs so tax audit applicable.

v ramachandran

v ramachandran (Querist)
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13 February 2021 SIR
KINDLY ADVISE AFTER PERUSING THE FOLLOWING DATA :
I AM A SENIOR CITIZEN OF 69 YEARS AGE.
MY INCOME IS NOT TAXABLE AFTER APPLYING REBATE UNDER SECTION SEC 87 A AND DEDUCTIONS AVAILED UNDER 80C, 80TTB,80D AND STANDARD DEDUCTION FOR PENSION . THE SHARE TURNOVER FOR FY 2020-2021` IS LESS THAN 1 CRORE. WITH THESE DATA AS CONSIDERATION I HAVE BEEN REPEATEDLY TOLD I NEED NOT GET THE AUDIT DONE. PLEASE RECONFIRM THE EXACT POSITION. SORRY FOR THE TROUBLE.
V RAMACHANDRAN
COIMBATORE

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 February 2021 Yes, agree with you in view of amendment tax audit not applicable for you. Sorry for the earlier reply.

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