Does Quicko provides Audit facility? If not, please suggest

Last year I incurred loss in intraday trading. So, I need to get audit done before filing ITR (as per Quicko’s recommendation). Please suggest if any company like quicko or others provide audit facility.

Turnover: 5.1 lakhs
Loss: 1.25 lakhs

Financial year: 2020-2021
Assessment Year: 2021-2022

Note: I’ve not opted for 44AD

@Quicko

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Why you need audit what is the turnover?

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@Praveen_P_Bommanagi Turnover is 5.1 lakh & loss is 1.25 lakh.

Chill man no audit. If you had opted for 44AD then you need to have audit only if profit is less than 6%

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@Praveen_P_Bommanagi please stop misguiding people. You have done enough on your post. Now dont misguide others on others post too.

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@Jason_Castelino

As per my understanding, I need to get audit & last date to file ITR for Audit cases is 15 Jan. Correct?

Please suggest what I need to do. If I need to get audit then please suggest any company like quicko which provides tax auditor facility.

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Yes. You are right. Though I am personally expecting the deadline to be extended, there is no official news yet. So for now 15th Jan 2022 is the date by which you have get your books audited.

You can get an audit done from any Chartered Accountant

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@Jason_Castelino sir…
Aap please guide kar do sir ji…
Kafi logon ko benefit ho jaega…
Regards

It’s simple.
Minimum profits that you should declare is 6 percent of your turnover.
If your profits are below 6 percent and want to show actual profits or loss then you have to get your books audited.

Example with a turnover of 1Lakh.
6 percent is Rs.6000

Case 1: Actual profit is 12000: audit not required.

Case 2: Actual profit is 3000:
You can either show profit as 6000 without audit or go for an audit and declare profit of 3000

Case 3: loss of 10,000
You can either show profit as 6000 without audit or go for an audit and carry forward loss of 10,000. This can be set off against profits in the following years.

Couldn’t put it in simpler words. I suggest you consult a CA and find out if audit is applicable to you or not.
If you can trust a doctor with his medication, trust a CA on his opinion on finance and tax matters.

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Why are you guiding people to go for audit if they don’t opt for 44AD.

Please read the new rules

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This article explains it in simple terms for tax filing info for F&O traders. I personally found it useful.

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Example 2

Mr X started trading in F&O for the first time during FY 2020-21. Turnover during the year is 4 crores and he made a loss of 20 lacs.

Audit is not required if the 5% condition related to cash transactions specified above is fulfilled.

Are you a CA?

Yes.

So kindly explain if I did not file ITR 4 or ITR 3 for last year(I started trading this year last year only ITR1 was applicable for me) - and i don’t opt for 44AD.

Then why should I go for audit of turnover is less than 10Cr???

@Jason_Castelino

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@Jason_Castelino sir…
Do kindly share ur views…
My ca also has reverberated what @Praveen_P_Bommanagi has stated…

Thanks

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great praveen thank for sharing article from capital minds, most of the CAs also need upliftment of knowledge.

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I think the rules are so much clearer now than what they were 8-9 years back, around the time I had started trading. In fact, for my first two filings, I received scrutiny notices from the ITD. The local CAs had no idea on how to account for F&O income and had totally messed up everything.

Now, things are very simple. If your turnover is less than 2cr, you can opt for presumptive taxation (sec. 44AD) and declare your profits at 6% of your turnover. Or, you could maintain books of accounts and declare your profits or losses as the case maybe and file the returns without the need for an audit, provided your cash payments and receipts are less than 5% of turnover.

If your turnover is more than 2cr but less than 10cr, then you can’t opt for presumptive taxation and you HAVE to maintain books of accounts and declare your profits and losses as the case maybe. Tax audit of books is not required in this case as well, provided cash receipts/payments is less than 5% of turnover.

If your turnover is over 10cr, you can’t opt for presumptive taxation again and you have to compulsorily get your books audited.

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Yes but these so called CA’s need to get updated with latest rules. I see lots of them are suggesting for audit for FnO segment as people have just started trading this year.

These people are making money by just adding fear factor of audit unnecessarily.

Quicko will create a account book based on details from broker.

Hope people will realise this and stop paying unnecessarily to the CA’s

PS: no disrespect for CA’s.

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There is a reason many of the tax consultants suggest their clients to undertake an audit of their books of accounts and it is not motivated by monetary gains, but to avoid unnecessary hassles down the line.

I am not going to talk about the position of the law as to whether or not a person has to get their books audited, as much has already been said by many, but rather about the instructions issued by the Income Tax Department as regards filing of returns.

While these instructions may not have any legal binding, the fact is that the validation rules w.r.t the returns are based on these instructions.

An excerpt from the instructions issued for ITR-3 (page 27 of the document)

Note: In case you are reporting loss at Sr. No. 38 of Schedule Business or Profession or in at Sr. No. 64(i)(b), 64(i)(d),64(ii)(b) and 64(ii)(d), 65ii, 65iv in P&L (No account case) then you are required to maintain books of accounts and get them audited. Alternatively, you should report minimum 8% of turnover as your income else your return may be treated as defective.

While these instructions may actually be contradicting the provisions of the Act, since the processing of returns for the most part is automated, I think it may be in our interests to comply with the instructions to the extent possible.

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So couple of questions on this.

  1. What about the prescribed turnover limit.

  2. If person not opted for 44AD and does not want to opt for it( this is completely optional).

  3. Section 44AB(e) states that if transaction are through digital channel then no need of audit. Maintain books of accounts. Until prescribed turnover is exceeded.

  4. Audit applicable to only those who have opted for 44AD and have less than 6% profit. But also have tax liable income(more than 2.5LPA from other source).- again the turnover should be less than 2cr.

  5. Not sure what are the implications if you go for audit in case it is not required.

My CA suggested no for audit as i fall under point 3 - I have filed ITR-1 till date and only involved in business for this AY.

  1. 44AD Is the key to understand all the confusion here.

@Suyash.K please tell if my view is wrong here.