I have traded in FnO for the Financial year 2019-20 till dec 19 turnover is 1.30 crore and loss of 2.5 lakh should i get it auditied or can i write off as loss in my income.income is 8 lakhs approx deducting my other expenses comes below 5-6 lakhs approx.
@imavii I think you would have to classify loss of 2.5lakhs into speculative business loss and non-speculative business loss. Intraday trading would fall under speculative business loss and such losses can be set-off only against speculative business income either in current year or in following 4 years. Non-speculative business loss can be set-off against any income other than salary income. So. I hope 8 lakhs is not a salary income. You might need to get it audited as the limit is Rs.1Crore and have to file the return within time limit to carry forward the losses.
Tax audit is applicable in either of the following cases:
Losses from business income (Intraday & F&O trading)
Turnover of more than INR 2 crore
Profit is less than 6% of the total turnover
Secondly, F&O trading is treated as a non-speculative business activity for Income Tax purposes, so you can carry forward this loss to the next 8 financial years.
Current Year: The loss can be set off against any income except salary
Future Year: The loss can be set off only against Business Income - both Speculative and Non-Speculative
Therefore,
Tax Audit is required
Prepare financial statements - Balance Sheet and P&L
You can claim expenses if they are directly related to your F&O Trading business