We are in business of sale and pruchase of equity shares which are sold after holding less than one year. we want to treat the income as capital gains. so what is the liability of the tax audit and how the total turnover is calculated.
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Short term capital gain and tax audit.
Replies (6)
Tax audit is applicable for business income and not for short term capital gain.
But if you are doing business then you total value of shares sold in a year will turnover.
But if you are doing business then you total value of shares sold in a year will turnover.
As you are in business of sale purchase of equity shares...means you are in business of trading securities..the income will be taxable under the head Business and profession. the fair value consideration will be treated as gross receipts. The limit for tax audit is 1 cr for p.y.16-17
So it becomes clear that if the share trading is treated as short term capital gains than no audit is needed and if treated as business that audit is needed.
Not able to locate article mentioned by Mr samir.
Tax Audit US 44AB is required where the turnover of the Business or Gross Receipts of a Profession exceed specified limits.
Since you are earning Capital Gain question of Tax Audit does not arise.
IF THE ERSON HAVING SPECULATION INCOME TOO THEN TAX AUDIT REQUIRED OR NOT
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