Need Help regarding Turnover & Audit

Hi,
I am a salaried employee & having income of 8 lacs. Recently started trading with zerodha in delivery based equity. I was having a share in delivery and sold it with profit margin and then again bought the same company share on the same day then it counted as intraday, being a newbiee I was unaware.
Now
Salaried Income : Rs. 8 Lacs for which I am paying taxes
Intraday Turnover : Rs. 80
Intraday Profit : Rs. 80
Delivery Based Short Term Profit : Rs 2500
Delivery Based Sell Value Turn Over: Rs. 15000
I have following queries

  1. Do I need for Tax Audit ?
  2. As I am ready to pay STCG, then intraday trading may also be considered in stcg for paying tax as amount is very less
  3. Which ITR form will be required ITR-2 or ITR-3
  4. Can I set off the intraday profit with another scrip of intraday loss and by that not required to mention this intraday profit as a business income ??
    Please help me

Continuing the discussion from Need Help regarding Turnover & Audit:

@Quicko @Nithin

Also to ask when the all the transactions &brokerage charges are taken into account then can we set off this intraday profit with these, then also the business income may be taken as zero and no need to show this

Pl clarify along with above queries

Hi @Man1986,

  1. For tax audit applicability, the following factors are considered:
  • Total turnover from speculative and non-speculative transactions is taken into account,

  • Profit/Loss incurred during the year,

    In your case, since the turnover is less than INR. 1 Cr. and Profit is more than 6%, a tax audit is not applicable.

  1. Intraday trading is considered as Speculative Business Income hence it can not be considered as STCG.
  2. Since you have Capital Gains and Speculative Business Income, you need to file ITR-3.
  3. You can set off Speculative Losses against Speculative Profits under the Income Tax Act. However, the net profit/ losses need to be reported while filing ITR.
  4. You can claim the expenses while calculating net profits from speculative business income.

Hope this helps! For any further questions feel free to connect with us at Quicko.

1 Like

Thanks for the reply @Quicko, but as speculative profit is so much less, isn’t it possible to not show in itr
And only itr-2 may be filled with this speculative profit also with the stcg and total tax to be paid on the sum amount…

@Man1986

Since your profits are negligible, the other option you can exercise is to show the same under Income From Other Source (IFOS) and file ITR-2. Since Speculative Business Income is taxed at slab rates and IFOS is also taxed at slab rates.