Audit Applicability on Traders for FY 22-23 AY 23-24

Question 1 - Is audit applicable for an individual filing ITR3 as a trader and having the following turnover and profit :

Delivery : 12,500,000
Future : 730,000
Option : 520,000
Intra : 24,000
Total : 13,774,000

Delivery : 620,000
Future : -3,200
Option : 1,050
Intra : 24,000
Total : 641,850

Turnover is less than 10 crore, however profit is less than 6% of turnover.

The individual has NOT willingly opted out of presumptive tax in last five years.

Question 2 - For individual filing ITR 3 as a trader, can STCG on debt mutual fund be included under business income or is it capital gains?

@Quicko please help.

Good question. Many who have F&O income less than 6% of Turnover would like to club STCG if possible and be able to put the sum under presumptive taxation.

Hoping for a precise clear answer from @Quicko :slight_smile:

Hi @Power @VijayNair

Tax audit is not applicable for turnover up to ₹10 crore provided that the total cash payments/receipts do not 5% of the total cash payments/receipts.

*Tax Audit is applicable if your total Income exceeds the basic exemption limit and you have not followed the rules of the presumptive tax scheme u/s 44AD

Also, STCG on debt mutual funds will be taxable under capital gains at slab rate.

It appears in your case, if you are willing to pay more tax, you can file under “Presumptive taxation” without Audit.