Sec 44 AB says compulsory tax audit above 1 cr.
Sec 44AD says if turnover less than 1 cr and profit declare less than 6 % of turnover tax audit required.
Mr A turnover less than 1 cr so sec 44 AB tax audit not applicable.
F&o is eligible business u /s 44 AD as far as I read.
But if I am never opting for sec 44 AD presumptive section on the faith in f&o every transaction is processed digitally and I have to report the true picture and going with Net profit method always ,Can the condition of 44 AD is still binding on me where I report actual loss as per broking company statement.
Do I really require tax audit just because other head income viz salary exceed tax exemption limits.
Moreover , I learnt that if actual profit % is let's say 15 % then 6% cannot be declared because in f&o as transactions are PAN no based and everything is under the scanner of ITax deptt.
If there is no benefit of presumptive taxation in case of of f&o trading which is done through Reconized stock exchange and its stt paid too then I feel only turnover crieteria is to be see to judge whethet tax audit applicable or not in case of f&o.
44AD must be for those small traders who do maintain books and doing cash transactions and still declare income less than 6% of turnover.
Please correct me if I am assuming wrong.
Regards,
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Is section 44 AD condition mandatory applicable on f&o ?
Replies (11)
which itr to file?
1/2/3
1/2/3
filing ITR 3
my argument is tax audit 44 AD applicable for those only who earlier file under this scheme and now taking switch
I never opt presumptive scheme and turnover also less than 1 cr
but salary above 2.5 lacs ( do I need to check this condition as I m not adopting 44 AD )
my argument is tax audit 44 AD applicable for those only who earlier file under this scheme and now taking switch
I never opt presumptive scheme and turnover also less than 1 cr
but salary above 2.5 lacs ( do I need to check this condition as I m not adopting 44 AD )
futures and options construed as business. so either declare 6% of turnover or audit your books. technically, auditing your books will cause less amount than offering 6%
salary is as per form 16
loss is as per broking company p&l
are they not sufficient documents to convince Income tax deptt.
It seems tax audit is a mere formality for salary people even business loss not allowed to set off agaist salary so no benefit of tax liability being reducing.
As filing business ITR 1st time so never earlier took advantage of 44 AD.
Based on your reply should I conclude that even 44 AB not applicable (turnover less than 1 cr ) sec 44 AD conditions automatically applicable ? (means even if turnover less than 1 cr and there is a loss from f&o but other head income (salary here) above tax exemption limits so tax audit required ).
I was of the impression that those who regularly filed under presumptive scheme declaring less than 6 % of turnover as profii next year and still that profit above 2.5 lacs then tax audit required. (In view of loss for such presumptive scheme filers there total taxable income can be checked viz. salary etc )
Tax audit exp is not a problem but tax audit itself require all personal disclosures.
loss is as per broking company p&l
are they not sufficient documents to convince Income tax deptt.
It seems tax audit is a mere formality for salary people even business loss not allowed to set off agaist salary so no benefit of tax liability being reducing.
As filing business ITR 1st time so never earlier took advantage of 44 AD.
Based on your reply should I conclude that even 44 AB not applicable (turnover less than 1 cr ) sec 44 AD conditions automatically applicable ? (means even if turnover less than 1 cr and there is a loss from f&o but other head income (salary here) above tax exemption limits so tax audit required ).
I was of the impression that those who regularly filed under presumptive scheme declaring less than 6 % of turnover as profii next year and still that profit above 2.5 lacs then tax audit required. (In view of loss for such presumptive scheme filers there total taxable income can be checked viz. salary etc )
Tax audit exp is not a problem but tax audit itself require all personal disclosures.
but that's the requirement as per statute. we can't bypass it
I see
next year I my profit % is 20 % from derivatives (f&o being done on NSE ) can I declare 6 %
next year I my profit % is 20 % from derivatives (f&o being done on NSE ) can I declare 6 %
no..
you have to declare either 6% or any other amount higher than the aforesaid amount, as the case may be...
you have to declare either 6% or any other amount higher than the aforesaid amount, as the case may be...
Then sir what is the benefit for me from this scheme.
If I declare less than 6 % I have to go for tax audit
If my profit % is more than 6% I have to pay accordingly as u said.
(The only advantage I can see in declaring mIn. 6 % is no need to maintain books and no tax audit required )
But its not a big advatage books automatically maintained by system. Transactions are PAN no based and through banking channels. So whats the difference between f&o trader and other trader who do not naintain invoices and deàl in cash . (merely rate difference 6 % vis a vis 8 %)
Thanking You
If I declare less than 6 % I have to go for tax audit
If my profit % is more than 6% I have to pay accordingly as u said.
(The only advantage I can see in declaring mIn. 6 % is no need to maintain books and no tax audit required )
But its not a big advatage books automatically maintained by system. Transactions are PAN no based and through banking channels. So whats the difference between f&o trader and other trader who do not naintain invoices and deàl in cash . (merely rate difference 6 % vis a vis 8 %)
Thanking You
in my opinion, generally assessees disclose only 8% or 6% as the case may be under 44AD under eligible business because they don't maintain books and it's difficult ascertain the exact net profit. but in your case, since the depository account holder itself maintains p& I, you can't go with 8% or 6% but with the actual profit earned
So if I cannot take advantage of 6 % when my profit % is more why this section imposing unnecessary tax audit liability on me.
When the depository holder p&l itself is showing there is a loss and I agreed with that why tax audit is being imposed. What tax audit will add except a mere audit stamp.
It seems I am not getting any relief in any scenario.
Either compulsory tax audit
or pay tax as per actual.
When the depository holder p&l itself is showing there is a loss and I agreed with that why tax audit is being imposed. What tax audit will add except a mere audit stamp.
It seems I am not getting any relief in any scenario.
Either compulsory tax audit
or pay tax as per actual.
If main income is salary for the year, then F&O income becomes speculative income and is taxable 30% bracket. ITR2 is enough. It all depends which income is main source of livelihood and which income is more etc.
Experts can guide more.
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