TAX AUDIT IN CASE OF TRADING

SUPPOSE A NON WORKING PERSON TRADE IN F&O. TOTAL TURN OVER IS 19 LAKH AND HE INCURS LOSSES OF 80 K RUPEES.
IS THERE ANY REQUIREMENT OF TAX AUDIT.???
HE IS NOT HAVING ANY SOURCE OF INCOME TOO.

Replies (7)
Quick Summary
This discussion clarifies when a tax audit is necessary for individuals trading in Futures & Options (F&O), particularly when incurring losses. While Section 44AD outlines conditions for presumptive taxation, the consensus is that an audit is generally not required if there are only losses and no other income. However, if you wish to claim these losses or carry them forward, a tax audit might become mandatory under Section 44AB, especially if your income exceeds the tax-free threshold.

No as per section 44AD audit is mandatory in case when an individual/HUF/Partnership Firm have turnover upto Rs 2 crore, profit claim below 8% or 6% AND Gross Total Income more than maximum amount not chargeable to tax.. In your case since it is loss no audit required.
If you wish to claim loss, audit is necessary
@ CA Sandeep Mahipal Ji Can you please give reference of section in which it is written that in case of loss audit is necessary as in section 44AD it is not written.
Audit is not required.

BUT I READ SOME WHERE AUDIT IS REQUIRED

1)-WHEN TURN OVER IS LESS THAN 1 CR AND PROFIT/LOSS IS LESS THAN 6 % OF TURNOVER.

2)- OR TURN OVER IS MORE THAN 2 Cr. , irrespective of profit and loss ,audit is required.
 

As per section 44AD, either show profit at specified rate or one shows below the specified rate, audit id compulsory.
Loss is below that rate.
That's why if one wish to claim or cf the loss, audit is necessary.
@ Rohit Kumar do not read section at any website except Income Tax site, read act section 44AB in which it is specified that where a person has opted for presumptive scheme under section 44AD and he claims his income lower than the deemed profits and his income exceeds the ceiling for chargeability of income tax, is also required to get tax audit done. The word used and means both the condition need to be satisfied. 1. claim income lower than deemed profit 2. income exceeds the 250000. Thus in case of loss and no other income i.e. assessee have only loss from business in that case audit is not required.

@ CA SANDESH MAHIPAL Ji please check section 44AB prescribed cases in which audit is manadatory. In section 44AD audit requirement is not written.

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