Retuen filing for small derivative loss

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2015 One client is a salary earner...he has incurred small loss of 5000 in derivative market on a turnover of 60000. What is the way out to not go for audit u/s 44 AD as there is a loss? He does not mind either forgetting entire loss of 5000 or paying tax on 4800 being 8% of 60000 as compliance cost of audit is much more than tax liability. His income from salary and other income is more than 250000/-Please advise

Amol S Joglekar

Amol S Joglekar (Expert)
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24 August 2015 No need to do TAX AUDIT. If the MOD value (Positive difference between sale and purchase) exceed 1 crore, then only tax audit is applicable.

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2015 Sir, but section 44AD will be applicable as his income from other sources exceeds maximum basic limit prescribed under the Act. As profit is less than 8%, isn't it required to get accounts audited?

Amol S Joglekar

Amol S Joglekar (Expert)
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24 August 2015 No need to get the accounts audited. 44AD is applicable for eligible business. Why do think that derivative transaction is BUSINESS?

Querist : Anonymous

Querist : Anonymous (Querist)

24 August 2015 But amendment to section 44 AD from F Y 2012 specifies that all businesses are covered under the section. Derivative trading in share market (F & O segment) is also considered a business.

Amol S Joglekar

Amol S Joglekar (Expert)
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24 August 2015 His income from salary and other sources is more than 250,000.
Derivative trade value (Turnover as you mentioned)is 60,000....
See the proportion..it is also suggesting that derivative is NOT business in your client case...

Querist : Anonymous

Querist : Anonymous (Querist)

25 August 2015 I want more expert views. Also please let me know return can be filed in ITR 4 form showing loss in schedule BP and declaring 8% profit on the turnover in the same schedule in item 34?

Amol S Joglekar

Amol S Joglekar (Expert)
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26 August 2015 show either or
either LOSS or 8 %

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