Ask Me Anything about Budget 2021 Taxation changes

Just like you, we too were awaiting one of the most important events of the financial year - Budget 2021.
It was announced by FM Nirmala Sitharam on 1st Feb 2021.
This year, Budget 2021 is going to be the first paperless budget.

The Income Tax changes announced in Budget 2021 that caught the spotlight:

Highlights


Check out the Budget dashboard for a Recap of Budget 2021.

does this increased tax audit apply for f&o trades… intraday as well as positionsl?

Hey @gaurav_choudhary,

Yes, the tax audit limit increased from INR 5cr to INR 10cr, for taxpayers where 95% of the transactions are digital.

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is the effect of budget over now??? will now stock prices move according to technical anylsis??

what about volatility??

The audit limit increased from 5 crores to 10 crores. Does it mean we don’t need an audit if the turnover is less than 10 crore?

Hi @Jack_R,

In the budget 2021, the tax audit limit is increased from INR 5 crore to INR 10 crore.

However, even when the turnover is less than INR 10 crore, the other conditions to be fulfilled are:

  1. 95% of the transactions should be digital
  2. Profits should be greater than 6% of the turnover.

Hi, If this year I declare the FNO Loss by taking the audit route. Can I go for presumptive income next and offset the Loss ?

Hey @teenscm

Loss from F&O Trading can be set off against B&P income. Thus, if you carry forward F&O Loss, you can set-off the same against presumptive profits in future years.

However, it must be noted that once you opt-in for presumptive taxation and opt-out of it later, you cannot claim its benefit for the next 5 years. In the case of presumptive taxation, you cannot claim expenses and carry-forward loss.

Hope this helps!

  1. Profits should be greater than 6% of the turnover.
    So it means we need an audit even in case of a loss?

Hey @Jack_R

Due to the conditions of Section 44AB, if an individual has incurred a loss or profit which is less than 6% of the total sales/turnover and total income is more than 2.5 lakhs, then the tax audit is applicable.

Hope this helps!

I have incurred loss but my income is less than 2.5 lakhs. Is tax audit applicable?

Tax Audit is not applicable.

Hey @Sam_M

Tax Audit is not applicable if your income is less than INR 2.5 Lakhs.

Hope this helps!