Tax audit or not

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santosh kumar mishra (Querist)

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)

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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