Tax audit applicability

As per section 43(5) F&O transactions are treated as non-speculative (normal) business.

As per section 44AA  for non specified business: 

• Persons carrying on a Business are required to maintain books of accounts if, in any of the 3 immediately preceding years, their:
  • Total Sales/ Turnover is more than Rs. 10 lakhs, OR
  • Income is more than Rs.1,20,000
• For newly set up profession or business: If it is likely that above limits may be exceeded

As the total turnover is 75K, there is no requirement of maintaining books...............No question of tax audit....

Respected Sir,

Yes, As per section 43(5) F&O transactions are treated as non-speculative (normal) business.

But all the relevant articles referring the provision of section 44AD,, ie if your profit is less than 6% of turnover and your income exceeds the amount which is not chargeable to tax, then tax audit is applicable, the articles referring 44AD why???

Respected Sir,

Yes, As per section 43(5) F&O transactions are treated as non-speculative (normal) business. But all the relevant articles referring the provision of section 44AD,, ie if your profit is less than 6% of turnover and your income exceeds the amount which is not chargeable to tax, then tax audit is applicable, the articles referring 44AD why???  

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You have option to declare income under presumption, at 6% profits.

But in case your profits are lower than as prescribed under the section 44AD,  and also if total income is more than basic exemption limit, you have to maintain books of accounts as per section 44AA and further to get such books of account audited as per section 44AB. But as per section 44AA you are not required to maintain books of accounts as said earlier.....

Respected Sir,

You have said that you have "option" to declare income under presumption, at 6% profits. if we dont go/ opt 44 AD and shows loss then can we avoid tax audit provisions.

 

Yes.

I repeat: As the total turnover is 75K, there is no requirement of maintaining books (sec 44AA) ...............No question of tax audit....