Shares Trading (Delivery based) - Tax Audit u/s 44AB

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This query is : Resolved

Somebody (Querist)

12 April 2008 1. A parson is engaged into frequent trading (buying and selling- not as invesment) of share with turnover exceeding Rs.40 lakh in a year, should he get his accounts audited u/s 44AB?
2. Pl also suggest what would be the liability u/s. 44AB in a seperate case - if a persons Gross Turnover has exceeded Rs.40 lakh in a year IN INTRA-DAY TRADES, but the net receipt (total of difference of each intra-day Sale & purhcase) is 5-6 lakh.
3. Should the above be clubbed with the normal business turnover.

Jitender

Jitender (Expert)

12 April 2008 1 yes
3 both the businesses can't be clubbed.because one is a normal business & other is speculation.

Somebody

Somebody (Querist)

12 April 2008 Thanks. Income from trading in Shares, and wef Asst Yr 2006-07 income from F&O also, is no more in "Speculation" category.
Further, I want to ask that Trading in Shares - in which there is no broking, no consultancy, no customer - is really a "Business".
Please review the suggestion.

Subash Gaijes

Subash Gaijes (Expert)

12 April 2008 1. The turnover for the mentioned case is Net amount. ie. Purchase value - Sale Value. If that exceeds 40 Lakhs, 44AB applies.
2. No 44AB
3.No. That is speculative Business

Somebody

Somebody (Querist)

12 April 2008 Thanks for replies.
PLEASE NOTE MY IDEA:
1.Trading in Shares - in which there is no broking, no consultancy, no customer - is really a "Business" for the purpose of 44AB.
2. Income from trading in Shares, and wef Asst Yr 2006-07 income from F&O also, is no more in "Speculation" category.
Please review the suggestion.