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

Taxation
1

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

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

Profit
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.

2

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:

3

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.

4

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