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ITR-3 Presumptive 44AD + Business income - Requirement of Audit

Tax queries 797 views 4 replies

Adi

teacher

46 Points Posted on 07 April 2026

I used to submit income (from tutions) under presumptive in ITR-4 under 44AD for more than last 10 years.

Now from this year onwards started trading in stocks.

1) There is net loss in intra day trading. The turnover is about 12000/-

2) 4.2% profit in short term trading with turnover - 2.7 lakhs.

From this year onwards I think I have to use ITR-3. And I will show the tutions money as usual in 44AD section and stock trading income under normal business income.

My question is whether audit is required or not since I am not switching from 44AD presumptive for tuitions money but adding extra for stock trading?

Replies (4)

Quick Summary

Using ITR 3 with 44AD plus trading income does not trigger audit if presumptive conditions are met and turnover is within limits. Intraday loss is speculative business, delivery trades are capital gains. Audit applies only if limits or presumptive rules are breached.

Aashok FC Advisory

Finance Compliance Consultant

925 Points Posted on 07 April 2026

👉 Audit is required

✔ If total income exceeds exemption limit

✔ Because trading profit is < 6%

👉 Audit not required

✔ If total income is below ₹2.5 lakh

👉 Tuition under 44AD remains unaffected.

Adi

teacher

46 Points Posted on 08 April 2026

Thank you very much sir. What is exemption limit? Is it total income - 2.5 lakhs? or something else?

Gautam Bothra

Chartered Accountant

78 Points Posted on 08 April 2026

1) Intraday trading is to be reported as speculative profit under Business Income.
In your case it is a loss and you can carry it forward for 4 years

2) Short term stock trading profits (provided they are delivery based) are to be reported as capital gains

You do not need to get your books audited as long as you are within 1 crore threshold of your income and reporting presumptive income which is not less than requirements of Sec 44AD.