Do i need a tax audit

#1

Hi if my turnover from FNO is 80 lacs in a FY and i make a profit of 8 lacs in the FY . I have some interest income from fixed deposit to the tune of 5 lacs per year and no other income.

i) In such a case when i file my income tax return do i have to get a tax audit done by a CA?
ii) Can i take presumptive income of 6% of 80 lacs ( ie 4.8 lacs) as my income from FNO while filing my return ?

iii) which ITR i need to fill.

kindly reply to above query

rgds
Deepak

#2

@Quicko @vishvajit_sonagara

#3

Hi Deepak,
Tax audit is recommended when a trader has high turnover.
A tax audit is compulsory in the following 2 cases:

  • Turnover greater than INR 1 crore, and has
    • Losses
    • Profit is less than 6% of the turnover
  • Turnover is more than INR 2 crore

Secondly, under the presumptive taxation scheme, the income should be disclosed at 6% of the turnover or the actual income, whichever is higher. Therefore, you are required to disclose the income of 8L and not 4.8L.

Since F&O trading is treated as a business activity, you should file ITR 3.

#4

In determining options turnover is sell value along with profit/loss is included.

#5

Thanks Quicko
can u please reply specific to my query no i) and ii)
many thanks

#6

@Quicko
Thanks Quicko
can u please reply specific to my query no i) and ii)
many thanks

#7

Hi,

i) In such a case when i file my income tax return do i have to get a tax audit done by a CA?
No
ii) Can i take presumptive income of 6% of 80 lacs ( ie 4.8 lacs) as my income from FNO while filing my return ?
You need to show actual income 8+5=13L

iii) which ITR i need to fill.
ITR4

Those who do not need audit, the last date was 31-Aug-2019

#8

@deepak2508 ,

i) You are not required to get tax audit because your turnover is less than INR 1 cr and you have profits.
ii) Under the presumptive taxation scheme you are required to take higher amount from the following 2 options:

  • 6% of the turnover i.e. 4.8 lacs
  • actual profit i.e. 8 lacs
    Therefore you are required to take INR 8 lacs i.e. the actual profit.
#9

@Quicko
thank u quicko…last query
i) for digital transactions ( as in stock exchanges) i hear the turnover limit is 2cr instead of 1 cr for tax audit
ii) if in presumptive tax we have to take higher of the actual tax or 6% then whats the point of have a presumtive tax… ( is the presumptive tax only for those whose income is less than 6% and they have to pay more tax @ 6%)
iii) what is the tax rate for FNO income ( if i have 5 lacs as Fixed deposit interest income as well)

many thanks

#10

thanks kartik bhai

#11

@deepak2508
i) It is mandatory to get a tax audit if your turnover is more than INR 2cr. However, tax audit is also recommended when turnover is more than INR 1cr and you have losses or profit less than 6% of the turnover.
ii) You can opt for the presumptive taxation scheme and calculate your income at 6% of the turnover and pay tax accordingly if the profit is less than 6%, and avoid tax audit or maintaining books of accounts.
iii) F&O income is treated as a non-speculative business and therefore will be taxed at the slab rate under business income. FD interest is covered under IFOS i.e. Income from other sources and will be clubbed with your taxable income i.e. F&O income and taxed at the slab rate.

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