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Tax audit

14 July 2016

My income from bussiness (online job) is 3,50,000. And loss from share trading 1,90,000. (My income 3,50,000-1,90,000=1,60,000) I need a tax audit? If tax audit not required then how can i file my income.

Please clarify me.

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8 Replies

Senu Reddy (ca final) (291 Points)
Replied 14 July 2016

Tax audit applicable only if goss receipts exceeds 25 lakhs from business or profession.. in your case tax audit not applicable.... u can file ITR 4 for your income tax returns

Ganeshbaabu Ts (40 Points)
Replied 14 July 2016

OK. THANK YOU SIR. BUT F&O TRADING TURNOVER IS >2 CRORE. MY FRIEND TOLD ME TAX AUDIT IS COMPULSORY FOR ABOVE 2 CRORE TURNOVER IN F&O TRADING. IF NO NEED TAX AUDIT. HOW TO SPECIFY MY TRADING LOSSES.

Senu Reddy (ca final) (291 Points)
Replied 14 July 2016

Applicability of Tax Audit in case of derivative (F&O) Trading

Since income from derivative trading is considered as normal business income, therefore normal rules as applicable to tax audit as stated in section 44AB will be applicable in case of F&O trading also.

Therefore, the applicability of tax audit will be as follows in case of F&O Trading:

1) In case of Profit from transactions of F&O trading

In the case of profit from derivative transactions, tax audit will be applicable if the turnover from such trading exceeds Rs. 1 crore.
Tax audit u/s 44AB r/w section 44AD will also be applicable, if the net profit from such transactions is less than 8% of the turnover from such transactions.

2) In case of Loss from F&O Trading

In case of Loss from derivative trading, since profit (Loss in this case) is less than 8% of the turnover, therefore Tax Audit will be applicable u/s 44AB read with section 44AD.

Calculation of turnover in case of F&O Trading

Determination of turnover in case of F&O is one of the important factors for every individual for the income tax purpose. Turnover must be firstly calculated, in the manner explained below:

The total of positive and negative or favorable and unfavorable differences shall be taken as turnover.
Premium received on sale of options is to be included in turnover.
In respect of any reverse trades entered, the difference thereon shall also form part of the turnover.

Here, it makes no difference, whether the difference is positive or negative. All the differences, whether positive or negative are aggregated and the turnover is calculated.

Ganeshbaabu Ts (40 Points)
Replied 14 July 2016

OK THANK YOU SIR. WHERE I SPECIFY MY TRADING LOSSES. IS ANY FORM REQUIRED FOR THAT.

Senu Reddy (ca final) (291 Points)
Replied 14 July 2016

Approach any CA/expert in preparation of Financials.. based on the financials compute your income (Profit/Loss) & file your ITR

Senu Reddy (ca final) (291 Points)
Replied 14 July 2016

But TAX Audit applicability case it will be definetly CA only

Ganeshbaabu Ts (40 Points)
Replied 14 July 2016

Ok Thank You Sir.

Ganeshbaabu Ts (40 Points)
Replied 08 April 2018

Hi,

frelance income = 3,30,000 (amazon mechanical turk)

Intraday trading income = 7000 (gross receipt 12000) (without expenses)

speculation trading loss = 2100

short term capital loss = 2400

Shall i declare my intraday(f&o) income as a business income in ITR 3 P&L tab no 53(i). And shall i deduct my intraday expenses in my profit.

and shall i declare freelancing income as a profession income in 53(ii). and shall i deduct expenses in my profit.

Shall i carry forward Speculative loss (intraday equity) and short term capital loss in SCHEDULE CFL. Please clarify me sir.

What is the meaning of - Amount of the cash balance in ITR 3. I need to fill by bank balance. If that is not mean bank balace shall i leave balance sheet tab blank in ITR 3. Amount balance in my intraday trading account 30000. I need to fill anywhere. Please clarify me sir.