Is Tax Audit needed for filing Losses?

General
1

Hi,

I have a a loss of Rs 2.5 lacs on Turnover of Rs 4.3 lacs in F&O. Please let me know if Tax audit is needed for filing the loss? Also as I am not a regular trader, what if I do not file for losses?

2

If you are salaried with a taxable income, yeah you will need an audit. You will need to use ITR4. 

You can also show 8% of 4.3lks or Rs 32k as profits and pay taxes on it according to your tax slab to avoid audit. 

If you don't file the losses using ITR4, the chances of getting an IT notice is quite high. Check out Varsity module on taxation. 

We have also started a tax filing initiative for traders: http://tradetax.in/

3 Likes
3

Good initiative Nithin, will this app in sync with our Zerodha p&l account? I already have filed my 2015-16 return with my CA’s help hence don’t need this facility immediately but may require for the next year.

4

Thanks a lot for your clarification Nitin

5

Hello
Considering the privacy and confidentiality of data, and since Tradetax.in is optional feature available to you, no data will be shared / synced with your Zerodha P&L account.
You will have to separately provide the same once you have signed-up. Hence, even you will know type of data shared by you to the CA.

ClearTax - The easiest way for e-filing Income Tax Returns in India : File your returns - https://cleartax.in/business/partner-zerodha

6

@nithin So technically even if I have made losses and if I show 8% of turnover as profit then I don’t require audit, Correct ? Will it cause problems as I have actually made losses but showing it as profit (8%). As an example, I am freelancer, comes under 10% bracket of tax slab. Now I have Intraday loss of say -700 and turnover of Rs 1000. To avoid audit, I will show 8% of Rs 1000 as profit = Rs 80 and will pay taxes on Rs 80. Since I am under 10% bracket so I will pay 10% of 80 = Rs 8 as tax and get over with headache of tax audit. Actually, this is exactly my case here. Response awaited.