my client is engaged in derivatives transaction viz. futures & options regularly on National stock exchange.
I understand it will be treated as business income and the total profit /loss made will be added together and will be treated as turnover.
now in case of my client,
total profit transaction Rs. 8 lakhs.
loss transactions 3 lakhs.
so turnover 11 lakhs.
so can he declare income of 66000 under presumptive and get away by it , when in fact he has made a profit of 8 lakhs in the year.
Yes. That's sad but true.
Other issues -
1. What about opening balances in case there is audit next year ?
2. Will the Income Tax Dept agree to such lower profit in case there is a scrutiny ?
3. Will a CA be able to prepare and certify financials for the year in which 44AD was opted ? Will a bank agree for sanctioning loan where profit declared in ITR is less than Actual Profit ?
4. What are the chances of a CA qualifying the tax audit report stating opening balances are unaudited figures as certified by assessee.
Please deliberate on this before making the decision.
CAclubindia
