I’m a student and I have no income but have done some trading activity in F&O. I am considering to file my returns with Quicko.
I didn’t maintained any book of accounts, Balance Sheet and P&L statement. From what I’ve read in Zerodha Varsity, I can conclude that I don’t need an audit; but I’m considering to file returns to carry forward losses(-16K).
I haven’t filed ITR ever, so I’m confused and have doubts :
Is there need to file ITR as I’ve 0 tax liability ? What if I don’t File ?
*Can Quicko do the Job efficiently ?
Any other thing to keep in mind so that I don’t have any issues in future.
You need to file your returns mandatorily if you need to carry forward your losses. Your can’t set off current year loss with profit in next year if you haven’t filed your loss returns.
There are some criteria which defines who needs to file Income tax return.
As you have already quoted you are a student you don’t fall into the category of person earning income in excess of basic exemption limit so you nothing will happen if you don’t file your return.
Yes. Quikco works and their interface is easy to navigate.
If your total income falls below the basic exemption limit, you will not have a tax liability and hence are not mandated to file a return. However, it is important to note that voluntarily filing a return can be beneficial, as you mentioned you have incurred losses of 16k, so, you will be able to carry forward these losses and set off against future income, which can reduce your tax liability then.
Quicko is a DIY platform with a user-friendly interface. You will be able to easily file your return by yourself. Majority of our customers have trading income and are able to file their returns using our broker integration feature.
Additionally, under presumptive taxation scheme, you don’t need to maintain books of accounts in order to simplify the tax compliance process for small businesses and professionals. It is eligible for those whose total turnover does not exceed the prescribed threshold (currently ₹2 crore). Whereas under the regular scheme, you are required to maintain books of accounts and get audit done if the turnover crosses threshold limit.
business profession : share stock market trading only . and no other source of income
100% digital online transaction . turn over 2 crores .
if i choose ITR 4 presumptive taxation .
option 1 :
i have to declare profit @6% of the turnover , irrespective of the actual % profit
OR
option 2 :
i have to declare profit@6% of the turnover or the actual % ; whichever is Higher ?
i am confused !
some C.A.s say : option 1 is right and some C.A.s say option 2 is right ?
You should declare profit @6% of turnover or actual profit, whichever is higher. The presumptive taxation scheme was introduced for small taxpayers who do not maintain books of accounts and cannot accurately determine their actual profit or loss.
Also, reporting only 6% profit in the ITR when the actual profit is higher may lead to tax demand and penalties, since it can be treated as underreporting of income. In the case of stock market trading, the actual profit can generally be determined from the profit and loss statement provided by the broker.
As per the presumptive taxation scheme of the Income tax act, profit needs to be declared 6% of turnover or actual profit whichever is higher. If the person is not able to determine his actual profit percentage then he can declare profit at 6%.
Where does the act say of the two options, only the “higher” option should be chosen?
44AD. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head “Profits and gains of business or profession”
The phrase “or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned” itself makes it clear that the assessee can declare either the presumptive percentage or a higher amount. The Act nowhere permits declaring a lower amount under section 44AD without maintaining books and complying with section 44AB conditions. Hence, effectively, it is ‘8%/6% or higher, whichever is higher.’