I am full time employee and I trade during my spare time.
I was trading in equity,FO and Intraday.Infact I made loss of around 32K with turnover of around 12L.
I sent all my details to a local tax consultant but he did not properly send me any audit report.I did not file tax returns till now even though I wanted to file tax returns on time last year itself.
Do I need to still get tax audit?
I can’t claim loss now.I don’t want to claim loss also. Can I file returns without tax audit? My company already paid the taxes.I may have to pay only fine for delayed tax returns.
you dont need to get tax audit because your turnover doesnt cross the threshold limit of 2 cr… you did not mention the financial year for which you want to file return…if the return is for FY2016-2017 then you dont need to get worried as you can file returns till 31st july as you are an employee and tax audit is not applicable for you…
you can get more insight here… http://zerodha.com/varsity/module/markets-and-taxation/
Thanks a lot for your response.I did not file tax returns for the last financial year FY 2015-2016.Im still worries because AI read in Zerodha site somewhere “If Turnover is less than 1CR and profitability is less than 8% of total turn over,tax audit is compulsory” …Tax audit can cost another 5-6K for me…
tax audit is applicable only if the turnover is less than 1cr and income exceeds basic exemption limit…since you incurred loss you dont need to file tax audit return… now you cant carry forward loss as the due date for filing return for AY 16-17 is completed…you can only file a belated return before 31st march 2017
Thanks a lot for your quick response.
You have mentioned that " tax audit is applicable only if the turnover is less than 1cr and income exceeds basic exemption limit".My annual income for last year was more than 10L (company already deducted tax accordingly)… Do I need an audit?
your salary income should not be clubbed with business income…
Thank you very much chaitanya_maganti
Filing Tax returns even if not required is best option. You need to declare any assets you purchased like gold, property etc.
If declare all these every year in your returns you can live peacefully. Else you may get tax notice for sure.
For that matter if you are trading Filing ITR 4 is mandatory. There are tax consultant rererred by Zerodha.
Turnover for calculating tax is the absolute sum of profit and loss made during the financial year. Most of the traders confuse it with the trading turnover.
yes i agree with @umabathy … i forgot to mention…
Most of us do not keep any bills for purchases or expenses, but as a trader it is necessary to keep all the bills so that you can show them as proof of expenditure.
Also if income tax raid is done they will ask bills for all items in your home for example, Furniture, TV, Music System, Gold, Gym equipment etc.
If you don’t show bills they will calculate market value of those items and clasify them as illegal income.
If you show bills for all the items then they will ask for proof of income when you purchased those things.
It is clear to keep records and maintain good decipline.
Even if you’re honest, missing these things may land you in trouble.
Now a days IT department is using sophisticated technology like Artificial intelligence and data analytics to know every details of any individual.
Now aadhaar is mandatory for many transactions, with aadhaar department can get all your information with just one click of a button
99% of retail traders don’t know about taxation it is better to read Taxation Module at Varsity.
@tradeanalyzer sorry for wrong information which i have shared…
here is the actual provision if you have loss and your total income is more than Basic Exemption Limit.
u/s 44AD if your TO is less than 1cr and claim your income to be less than 8% and your total income is more than BEL then you have to get your accounts audited.
im very much sorry for misguiding you