Audit u/s 44ab in case of f&o loss


Chetan Sarawagi (CA)     12 July 2019

Chetan Sarawagi
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Hi All,

Facts:

1. There is a loss from F&O transaction which is considered as a business loss and the turnover is less than 1 Cr.

2. Income from Salary is 10 Lacs.

3. Income from House Property 2.4 Lacs

Question:

Is Tax Audit u/s 44AB applicable.

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Akhil (Student CA )     12 July 2019

Akhil
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tax audit not applicable...

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Kaushik Sen (student)     12 July 2019

Kaushik Sen
student 
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I think, tax audit liability arises u/s. 44AB(e) of the act.

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sujithavasa   12 July 2019

sujithavasa

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tax audit is not applicable

Arun Garg (HDPE pipes buss)     12 July 2019

Arun Garg
HDPE pipes buss 
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kindly add the loss and profit of the each transaction through out the year, it will become your turnover of the year. if it cross 1 crore than audit is mandatory and if turn over is below 1 crore then u have to show 8% of the turnover. as u have said there is net loss for all the transactions then you have to for income audit us 44AD

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rahul karke   12 July 2019

rahul karke

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Tax audit definitely applicable if there is loss due f&o and income exceed threshold limit ..you can avoid TA by paying 6% of turnover

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Suresh Thiyagarajan (Student)     12 July 2019

Suresh Thiyagarajan
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1. According to sec 44AB tax audit is mandatory if a person's gross receipts or T.O exceeds Rs. 1 crore during the PY. 
2. Trading in futures and options (F&O) will be a business and any gains or loss from the above business should be reported under the head PGBP. 
3. With respect to the applicability of Tax audit under sec 44AB, it is only the T.O or Gross Receipts that should be considered and profit or loss is of no consideration in here. 
4. Hence in your case, since your T.O is less than Rs. 1 crore Tax audit u/s 44AB will not be applicable for you. 
Please correct me if the above solution has an alternative view. 

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rahul karke   13 July 2019

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Dear Suresh ji , Since individuals are cover under section 44AD so don't you think tax audit due 44AD will be applicable to the assessee as his having profit less than 6% and his total income exceeds maximum amount not chargeable to tax

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Suresh Thiyagarajan (Student)     13 July 2019

Suresh Thiyagarajan
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Dear Sir,

If it is less than Rs. 1 Crore there is no question of Tax audit u/s 44AB. 

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subhagan sreerangam   07 August 2019

subhagan sreerangam

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good clarification and information


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