Tax audit applicability incase of loss in F&O.

Lets explain the provision of Sec 44AD
1.Eligible assesse -resident individual, resident Hindu undivided family or a resident partnership firm
2. has not claimed deduction under section 10A, 10AA, 10B,10BA , 80HH, 80RRB
3. SHOULD BE ENGAGED IN BUSINESS WHOLESALE TRADING, CIVIL CONSTRUCTION , OR ANY OTHER CIVIL CONSTRUCTION
A) PERSON CARRYING ON PROFESSION AS REFERRED TO IN SECTION 44AA(1)
B)PERSON EARNING INCOME IN THE NATURE OF COMMISSION OR BROKERAGE
C)A PERSON CARRYING ON AGENCY BUSINESS
D) A PERSON IN BUSINESS OF PLYING , HIRING OR ANY OTHER BUSINESS
4. TOTAL TURNOVER- RS.2 CRORES
5. ESTIMATED AT 8% PROFIT.

Audit is not applicable.

You may opt for 44AD and declare 8%

Yes, you could have carry forward the loss by filing ITR 3, without tax audit; but only if had you filed the ITR before 31.07.2023. Now loss cannot be carry forward.

@ Sukhwani,

As per Your query the time limit of filing is ended on 31/07/2023 . After the date losses can't c/f.

But, In your case Audit not applicable and You can file ITR 3 without opting sec 44ad.

Another option...  Just get your ITR Audited under 44AB and carry forward your loss instead of foregoing it...

A 44AB audit will cost 15-18 K (that's my CA in Bangalore - will depend on your Auditing CA and where you live).

So, see how much F&O loss you have left to carry forward after CYLA setoffs against other incomes. If it is more than 45-50K, then above may be better. Else, you can forego that loss and file a late return, but check that there are no other consequences of filing the late return for your case...  (Getting your ITR audited under 44AB and filing before 30-Sep will mean it is filed in time; so no consequences of late filing.)

Originally posted by : Dhirajlal Rambhia
	Yes, you could have carry forward the loss by filing ITR 3, without tax audit; but only if had you filed the ITR before 31.07.2023. Now loss cannot be carry forward.

Rightly said,....