Accounting and taxation in scalping

Hi all, I have a query.

I am basically a scalper and does major scalping in nifty and banknifty. I usually takes 7 to 10 trades with a lot size of (10-12) in nifty and 20 -25 in BNF.

I usually scap around 5% and close my positions on a same day.

My question is

I understand that the turnover is calculated as total sell side + absolute value of profit. As my number of trades are frequent with some bigger lots I would be having more turnover running into some 7 crores by year end. But my profits are less compared to these turnover. (Assuming it is less than 1%)

From taxation perspective what could be the impact if I take more trade with less profits. What would be the impact of such higher turnover in taxation.

Does anyone have any practical example?


Tax audit would suffice. Tax department may recheck your accounts as someone (individual) with let’s say 100 cr turnover is making 10L profit is hard to believe. However I don’t see any complications, provided audit is correct and appropriate tax is paid.


Hi @Sreeram_Ganeshan1

If your turnover is high and your profits are less than 6% of turnover, you can file your ITR along with an audit report with help of any chartered accountant and that would suffice.

Reference - Tax Audit under Section 44AB of Income Tax Act | Learn by Quicko