MY Turnover in equities for shortterm trades is above 1 crore…should i audit my account with CA
no need for audit. audit will be required only if your net receivables and net losses combined exceed 1 crore. go through the following linc in Zerodha. everything is very well explained. http://zerodha.com/z-connect/traders-zone/taxation-for-traders/taxation-simplified
His Shot Term Trades (Delivery Trades) value is crossing >1.1 Crore, but you mentioned NO AUDIT,
it's confusing? Could you please eloborate it simple longuage!
Thanks in advance
Audit would be required if:
- Turnover for financial year is > ₹1 crore
- If turnover < ₹1 crore and profitability is less than 8% of turnover (Section 44 AB)
- Also note that if your total gross total income (trading + Salary or other business) is lesser than Rs 2lks, you don’t need an audit even if your profit is less than 8% of your turnover or if turnover for the year is > ₹1 crore
Turnover is being calculated here just to determine if you need a tax audit or not. As per the guidance note from ICAI ( section 5.12, page 23).
- For Intraday equity — absolute sum of settlement profits and losses per scrip
- For Delivery equity — sell side value of the stock
- For F&O (Equity, Currency, Commodity) — absolute sum of settlement profits & losses for F&O) per scrip and the sell side value of option contracts
Tax Audit is not required if total income is less than basic exemption limit, turnover is less than INR 1 Cr and profit is less than 6% of turnover. However, the Income Tax Department has details of all trading transactions from multiple sources. On basis of such information, they send out tax notices to traders. Thus, it is advisable to report trading transactions in the ITR and go for tax audit in the case of losses.
You can read more about Tax Audit here - Tax Audit of Trading Income
You can write to us at [email protected] if you need help for filing your Income Tax Return.
Ok so you are saying whenever you have trading transactions - it is mandatory to file ITR i.e. report those transactions to IT?
@curiousvi, It is always a good practice to file your Income Tax Return, in case your income is less than the basic exemption limit you can file a Nil Return.