f&O taxation rules

My f&o turn over is 48lakhs and i have loss of 3.65lakh and intraday loss is 55k.My CA insisting to for 44ad and pay 6% of turnover for govt.But i want to carry forward both speculative and non speculative losses.Please help here.Googling gives me different answers.

Should i maintain my books and get it audited for carry forward of f&o ?

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Ya maintain account books, get audit and carry forward.

why to maintain books ? my turnover is less than 1 cr

Books of account is mandatory if OP income cross 2.5lac or 1.2lac gross profit (without expense) or gross sale/gross turnover exceed 10lac in FY. And audit is liable as your turnover is below 2crore with less than 6% profit (including loss) to carryforward losses and this audit was never liable to person whose turnover is less than basic exemption that is 2.5lac.
Go carry on with audit.


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if i dont do audit and carry forward for 8 years ? will that be a problem ? or else what is the correct method in my case?

This is more clear
Tax Audit Applicability: FY 2020-21 (taxguru.in)

As per the Budget 2020, (i.e from FY 2020-2021 onwards), an assessee having cash receipts and payments not exceeding 5%, is not liable for tax audit if his turnover does not exceed Rs. 5 crores
Due to the proposed change in budget 2020 the situation stands as follows, – For assesse having TO> 2 crores (but below 5 crores and having Cash receipts and cash payments not exceeding 5%), he is NOT liable to Tax Audit. This holds good irrespective of the assessee showing profits up to 6% or 8% as per 44AD or not.

So if you want to get the best benefit, you have to satisfy atleast one thing, you cant get all the benefits without doing any work.

Maintain books of Accounts yourself, and then you can carry forward losses upto 8yrs/4yrs as per applicable rules under different heads and you don’t need Audit upto 5 Crores Turnover and you dont need to go for Presumptive income.
You can pay small fee to CA and only maintain books without need for Audit.

But dont try to get away without Books, because in the guise of 44AD, you cant say I dont have 6% profit, i want to carry forward loss and I dont want to maintain books, and i don’t want Audit as well. ( This is a violation)

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my ca is favour of showing 6% profit of total turnover (44lakh) under 44ad ,when i have loss of 3 lakh, my ca shows 76k as taxable income slab,my intention to carry forward for 8 years.Pls tell what will be good for my situation

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The following info taken from Quicko website.

For carry forward you have to get it audited. If you plan to do F&O in coming years as well then you should not use 44AD of presumptive taxation.
And also claim STT, Brokerage, Demat, and other govt.charges along with internet cost, computer depreciation, CA fees, trading/investing course fee, books, as costs of running business and include them in loss as well to carry forward.

audited means i have to pay extra right ? but other ca says u need not get audited and can be carry forward with balance sheet and profit and loss statement.

Audit in his case is not mandatory, only the Accounting.
Only 44A, no 44AB and no 44AD

The problem with Quicko links being quoted in this case is they are not discussing Accounts case.
If you have Accounts, even if done by yourself within the Turnover( 5CR) and cash receipts/payments rules then this 6% and all doesnt come into picture and same with Audit.

If you have proper Accounts, why you forcefully want to prove profit or loss etc, the books will show the real scenario.

Trading business is 100% non-cash, and if you keep expenses digital, there is no argument for unaccounted income/expense. Thats why post 2019 more amendments came and they increased Turnover limit too.

@Jason_Castelino Maybe you can help with these Quicko links :smiley:

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I researched further and looks like your CA is right. If we are filing through ITR 3, then section 44AD doesn’t apply. And audit in case of profit less than 6% (or loss) is applied only when someone is opting for section 44AD and in that case ITR 4 is used.
*In ITR 3 we are already providing :
1.) Balance Sheet
2.) P&L statement
3.) Books of Accounts
So the only condition for audit in case of ITR 3 is if turnover crosses Rs.10cr.

@Chirag1 Thanks for correcting me.

For reference one can follow this :

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I already told you in my first post.
In ITR-3 show as business income and 44A is accounts case.
Some CAs want to whack extra in the name of complexities. By rule of Turnover, you dont even need CA in your case provided you get the Trading A/c, PnL statement, Capital a/c and Balance sheet ready.

Also ITR-3 filing knowledge is required because its not as simple as ITR 1 or 2.

Audit will not liable if turnover is less than 10cr but its only for intraday and you will be carryforward it for only 4yearso far I know.

Thank you chirag!

In cleartax if i upload zerodha its asking for balance sheet p/l along with auditor details
This is showing under non speculative books of regular accounts maintained.how to solve this prob

Many years back taxation rules were different and it required my CA to do his part.
Last 2 years you can directly add details in income tax website. Mine is ITR-3, I am not using any tax websites.


Its good that you file all detail by going through all process. But if you think time is important than you will seek for fast and reliable website.

IT website last year had some issues, this year nothing. IT was smooth. And there are many family a/cs too. not a single hiccup.
It was fast and reliable.

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You have understood the things rightly.
In his case audit wouldn’t be required. However books of accounts are to be maintained.

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