How to decide whether Audit required or not? Combination of presumptive + business

Taxation
45

@Quicko Thank you very much. Can I show both intraday and short term capital gains (clubbed) under 44AD?

46

Hello @adianadiadi

Yes, it can be shown under presumptive scheme under section 44AD.

Thanks

47
  • Intraday under 44AD
  • STCG under Capital gains section itr3(not under 44AD)
  • If showing short term trading as business under 44AD, the profit should at least be 6% of absolute sum of value of all shares sold per trade (turnover)
48

What if I show 6% profit for both speculative and intraday even though I am at loss in intraday and less than 6% profit in short term gainsā€¦? @Quicko @BB789

49

You can. Do note that the turnover calculations are different:

50

Thank you. I am slowly understanding how important your suggestion to show the short term gains under STCG rather than business income. However, it attracts 20% tax. Actually my income is not above threshold limit. So I am thinking of showing more than 6% profit for both intraday and short term gains (even though there is loss in intraday and less than 6% profit in short term) . Is it ok?

51

my turnover is around 2.5 lakhs for short term

52
  • How did you calculate turnover for STCG? If you sold Reliance 5 times, each time for 10k with a profit of 1k(bought for 9k), your turnover will cross 50k.
  • 87A rebate( the one that offers 12L exemption) cannot be used against STCG.
  • But, STCG can still be adjusted against basic exemption limit of 4L under new regime Short Term Capital Gain on Shares (Section 111A of Income Tax Act) - STCG Tax Rate and Calculation
  • Also once you opt for 44AD for STCG, You canā€™t get away from it for 5 yearsā€¦

Personally Iā€™ll suggest youā€™d opt for STCG in ITR3 even if you pay 20%. But, if you do opt for 44AD, Do note the caveats.