Tax audit or not

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santosh kumar mishra (Querist)
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02 December 2013 an individual who trade in share & derivative for self & others.his turnover is 3 crore ,whether he comes in tax audit or not & also give reason with section ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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02 December 2013 There is no harm if he gets his accounts audited in the absence of full knowledge as regards what constitutes turnover or gross receipt in his case.
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A person trading in shares in his own account name-
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If turnover exceeds Rs. 1 Crore he is required to get his accounts audited.
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A person trading in F&O in his own account name-
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If turnover exceeds Rs. 1 Crore he is required to get his accounts audited. Turnover in such a case means a total of Option premium paid, option premium received, profit in derivatives & Loss in derivatives.
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A person Trading for others:
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It is not allowed unless he is a registered sub-broker of a Main Broker and duly registered by SEBI for the purpose.
Turnover in this case means commission or other incentives if any earned by him.
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If he is doing all these-
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Make a total of relevant heads and decide accordingly.

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