Whether Tax Audit is Required ??

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This discussion clarifies whether a tax audit is required for a client trading in Futures & Options. With a turnover below ₹5 crore and a net loss, even after considering other income, the total income remains below the taxable threshold. Therefore, a tax audit under Section 44AB is not necessary, and the client can file ITR 3 using normal books of accounts.

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Querist)

11 June 2021 My Client does Trading in Future & Options and the Turnover as per Income Tax Act is below 5 Crore and has Loss of around 1.25 Lacs & also after considering other Income the Total Income does not cross the Maximum amount chargeable to Tax.

So whether Audit is required under Sec 44AB or I can file ITR 3 with normal books of accounts Case

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

11 June 2021 The income is below taxable limit, so tax audit not applicable.
File ITR 3.
Turnover should be calculated based on aggregate on favorable and un favourable values.

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Querist)

11 June 2021 Turnover Calculated Favourable plus Unfavourable and Premium Received on Sale of Options comes to below 5 Cr

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 June 2021 These payment and receipts are through bank, so no tax audit upto 5 crore turnover.

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