How does opting for 44AD impact speculative income

Hi,

An assessee has the following income sources this year:

- Income from business (this was filed under normal rules in previous years but we decided to switch it to 44AD from this year) with ~5-6 lakhs turnover (almost 80-90% as profit).

- Income from Intraday (speculative income) with turnover < 1 lakh.

 

Business income exceeds 2.5 lakhs but is under the 44AD limit. Also, there is no FnO trading involved here - only normal equity and intraday. Total turnover is < 25 Lakhs.

 

So my questions are:

1. Am I still eligible to use section 44AD as my primary business is eligible for that?

2. Do I need to maintain books/accounts for speculative business (intraday) separately OR do I need to maintain combined books/accounts for both these business OR am I eligible to not maintain any books/accounts?

3. Where do I declare my intraday income? Is it under Part B P&L (item 65) or under Trading Account?

4. What do I select under the question "Whether assessee is declaring income only under section 44AE/44B/44BB/44AD/44ADA/44BBA" AND "Are you liable to maintain accounts as per section 44AA?"?

5. What do I fill in Balance sheet? Do I fill just the no-accounts case (44AD) OR both sections (as 44AD + speculative) OR only the normal accounts case?

6. Unrelated to this particular case - but at what point does someone dabbling in intraday need to file ITR-3 instead of ITR-2? If turnover is <1,000 - do we still need to file ITR-3? Or, can I show that income under another head such as Other Sources or STCG?

Replies (5)
Quick Summary
This discussion clarifies how opting for Section 44AD for your primary business income affects the reporting of speculative income, such as from intraday trading. It explains that while 44AD allows for presumptive income without maintaining detailed books for that business, speculative income must be treated separately and may require separate book-keeping. The thread also touches upon the correct ITR form to use and where to declare different income types.

  1. Yes
  2.  Nees to check preceeding two years turnover & total income, otherwise no need to maintain books.
  3.  There is separate column to declare intraday trading income.
  4. Yes. & no.
  5.  No accounts for business income.
  6. Generally acceptable in Schedule OS.

You are welcome.        

Thanks for replying Dhirajlal,

 

2. No intraday trades in previous years at all. Only business income with turnover ~ 5 lakh in previous years.

3. If I'm eligible for no accounts case, I see the correct column is under line 65 - speculative income in the no accounts case.

4. But won't intraday income be separate from 44ad income? I should still mark "only under 44ad/etc." as Yes?

 

Really appreciate your help!

3.  Correct.

4. Yes, for your business income (as you have decided to declare it u/s. 44AD from this year).

Opting for 44AD does not prevent you from reporting speculative income or F&O income in the same return, but it does have an important interaction. Under Section 44AD, you declare income at 6 or 8 percent of turnover and are not required to maintain books. However, speculative income or F&O income falls under the PGBP head separately and you must maintain books for those. If you opt for 44AD and have F&O losses, those losses can still be carried forward, but you will need to file ITR-3 (not ITR-4) because ITR-4 does not support F&O or speculative income. Your eligibility to opt back into 44AD after a year of non-presumptive filing is also restricted. For a year-end compliance checklist that covers these income reporting decisions, this [financial year-end checklist](https://taxgarden.in/blog/financial-year-end-checklist-2026) is a useful reference.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
07 October 2026
Senior Account Manager

Amplio Invest

Mumbai

M.Com

View Details
Company
16 October 2026
CA article trainee

Zerdi & Co. Chartered Accountants

Pune

CA Inter

View Details
Company
06 October 2026
Assistant Manager - Audit and Compliance

Ravi K Jain & Co

Noida

Others

View Details
Company
14 October 2026
Accountant

Rize.farm

Bengaluru

B.Com

View Details
Company
10 October 2026
Accounts Associate Level 1

Abic and Mani Chartered Accountants

Kottayam

B.Com

View Details
Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details