My trading turnover for futures is around 8 crore for FY 2019-20. But most of the trades are intraday and if I use method of taking turnover as profit/loss of intraday then the turnover will be less than 1 crore. So, in this case tax audit is necessary or not?
And further I want to ask whether is there any turnover limit over which tax audit is mandatory.
Tax audit shall be mandatory if turnover exceeds the limit of Rs. 1 crore or Rs. 5 crore (if digital business is less than 95% of total business). However, one more criteria which needs to be taken care of while checking its applicability is the rate of actual profit earned during the financial year. In other words, if you have earned profits lower than 6% of the total turnover and your gross total income exceeds the limit of Rs. 2.5 lacs, tax audit will get mandatory.
The trading turnover calculation should be done only when the income from shares is considered as a business income and not when it is considered as capital gains income. You can check the method of calculating trading turnover from trading income for tax audit applicability on this article.