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Audit Requirement for Short Term Capital Gain

Others 1269 views 6 replies

Hi All,

I am a Salaried person. If I buy stocks and hold them for days/weeks/months (but not for a year), then I understand it's a Short term Capital gain or loss when I sell them.

Now where I looking for more clarity is that some of the internet posts say if this is shown as a business income and the turnover meets a certain value in crores, then it is subject to an Audit. But some other posts day, if it is shown as a Short Term Capital gain/loss then it doesn't need an audit. So my question is how this type of income/loss is to be shown? Does it depend if the person is Salaried or not?

Thanks in advance.

Replies (6)
It depends on various factors.

If you buy on a particular day and sell after one day or more then you are not required to go for Audit since it is capital gains.

If you are into options trading and intraday then there can be requirement to get accounts audited.

Better take help from professionals
If you have earned capital gain or loss,it will be treated as investment gain or loss and not required for audit but if you are dealing in option or derivatives it will became business income and in such a case audit should be required.
Sec 112A read . In excess of Rs.1 lac 10%
If there is no options trading & equity intraday trading then you may consider entire amount as capital gains.

Now everything is simplified.You will get tax report from broker for tax purposes
You may not get tax report . All of a sudden there may be instances of a notice if it exceeds rs. 1 lac for individual. In case of aop it has a different rule.
One must have practical knowledge on this to answer the query..Every broker is giving tax report on trading activities for tax filing purposes..You need not mannually calculate it


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