Does income tax department know the profits made by us?


#1

I received my first ITR order u/s 143(1) recently, and I noticed that it has 2 columns- returns calculated by CPC and returns filed by me.
I read on Zerodha taxation module that income tax department doesn’t know how much profit/loss we make, they only know the turnover.
So my question is, is tax calculated by CPC under 143(1)? Do they know the exact profit/loss we make in stocks?


#2

On a side note, I was thinking, is such a system possible where IT department calculates our net tax payable by themselves, and we can pay it directly or raise an objection if required?


#3

No, they cannot.

No.


#4

They have only trade data gathered linked to STT. So they won’t have idea whether it’s gain or loss


#5

In case of scrunity can they find exact details of p/l .Is broker or exchange liable to provide it.


#6

Income Tax demand information under 131 of of Income tax Act. A broker would provide the information he has maintained. The Broker need to provide the financial transactions reports , ledger , trade reports etc… The PL reports , Capital gain reports are additional reports for ease of traders/ Investors to compile while Tax filing are not obligatory.


#7

You trade in what instruments ?and what form did you use?


#8

FNO and Cash and mostly Intraday. I started trading only this year so for AY2017-18, I used Form 1 only. This year, I plan to use Form 4 though


#9

If you don’t mind what’s your scrip/trade wise turnover & contract wise turnover?for a reason I’m asking


#10

If they say ITR2 is enough then that’s all all problems solved see if you’re going for ITR 4 you cannot claim business expenses & Depriciations