Very urgent

If someone is having F&o loss of Rs. 20 Lakh, And turnover is Rs. 70 Lakh taking positive & negative separately Then whether in order to avoid 8% profit of turnover, he has to get its books audited
Replies (3)

As per Guidance Note on tax audit u/s 44AB the turnover in F&O transactions is to be determined as follows: 
(i) The total of favourable and unfavourable differences shall be 
taken as turnover. 
(ii) Premium received on sale of options is also to be included in 
turnover. 
(iii) In respect of any reverse trades entered, the difference thereon, 
should also form part of the turnover. 

In your case the tunover is Rs. 20 lakhs only.. No need for Tax audit

Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB. As per proviso 5 of Sec. 44AD, Audit is only required if income exceeds Max. Amount not chargeable to tax What are your views regarding my query while considering the aforesaid provisions.. Mayank taparia Ca final student
Originally posted by : Mayank Taparia
Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.

As per proviso 5 of Sec. 44AD, Audit is only required if income exceeds Max. Amount not chargeable to tax

What are your views regarding my query while considering the aforesaid provisions..

Mayank taparia
Ca final student

Mr. Mayank, I guess you are referring to sec 44AD. Sec 4AD is for presumptive income, it states income of the assessee is 8% of the gross receipts and assessee who wants to declare his income less than 8% should maintain books of account u/s 44AA and get them audited u/s 44AB, however assessee can claim highe income. 

 

Income from F&O transactions are not presumptive in nature. Sec 44AD does not apply to F&O transactions. 

refer this https://www.caalley.com/gn/30357dtc19988.pdf  Page 23

 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
19 October 2026
Accountants/Articles (Freshers/Experienced)

ADY & CO.

New Delhi

Graduate (Any)

View Details
Company
10 November 2026
FP&A Executive

Gujarat Guardian

Ankleshwar

CA Final

View Details
Company
19 October 2026
Accountant

Jari Saree Center

New Delhi

Others

View Details
Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
10 November 2026
Direct Tax Manager

CAAQ CONSULTANCY PVT LTD

New Delhi

CA Final

View Details
Company
23 October 2026
Sr. Accountant

SANKARAN & KRISHNAN

New Delhi

B.Com

View Details
Company
31 October 2026
Accountants

sankaran and krishnan

New Delhi

B.Com

View Details
Company
12 November 2026
Auditor

Oz Taxation

Vijayawada

Graduate (Any)

View Details