1.My mom is a housewife. I gave her INR 6 lakhs in FY2020-2021. She did FnO and incurred loss of 3lakhs.she has no other income. Total turnover of FY is 49.5 lakhs. Does she require a tax audit
2. I have earned 80k as profit from FnO in FY 20-21. Total turnover is 10lakhs. Do I require audit?
3. I got into FnO through a friend who suggested me and taught me FnO. After profit, I paid him 30k as I earned because of him. Can I show it as fees for consultation to reduce my tax liability?
1st case audit needed as loss
2nd casr audit not reqd as profit
Thank you
What about third case
I guess you want to show the 30k salary expense in your ITR and not in your mother’s ITR.
So, after salary expense of 30k, your net profit becomes 80k-30k = 50k. And this 50k is lower than 6% of 10lakhs (6% of 10lakhs is 60k), so I guess you will need audit.
Also, there is another provision that if total income is less than 2.5 lakhs or the basic exemption limit, then tax audit is not required. However, you have not mentioned how much is your other total income, so can’t comment on this part.
May be @Quicko can add something here.
Hi Quicko, can he claim salary expenses if he doesn’t get a audit done? Is audit compulsory in order to claim expenses irrespective of profit % and irrespective of total income?
Hey @Ashutosh266
Tax Audit requirement is based upon your turnover, profit/losses and your total income. If your turnover is less than INR 1 cr, in case of loss or profit. being less than 6% turnover, a tax audit is applicable.
One can claim expenses even if you file ITR without audit and any expenses related to trading can be claimed as an expense in your ITR provided you have supporting documents/proofs
In your case the amount you paid was advisory expenses and the same can be claimed in ITR as it is related to trading.
Hope this helps!
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