Trading turnover calculation - Intraday and Fno turnover separate?

Taxation
1

@Quicko @TAXIQ.IN

It says if turnover is less than 2 crore and profit is less than 6%(or loss) tax audit is applicable.

But trading turnover for intraday trading and F&O turnover is to be considered separately and than apply 6% rule?
or combined turnover and 6% rule?

For example, someone has FNO trading turnover of 1 crore and profit of only Rs 6,40,000 (so this is more than 6%) so audit not applicable
Intraday trading turnover is 10 lac and loss of profit is only 40,000 (which is less than 6% so audit is applicable)

But if we combine both - trading turnover is 1,10,00,000 and total profit is 6,80,000 - so tax audit does not apply
but if we consider intraday trading turnover separately - audit apply as income less than 6% of the turnover

So, please clarify if combined turnover and combined profit to be considered or separately?

2

Hey @curiousvi,

Income from both intraday and F&O trading is classified as business income. Hence, the combined turnover and profit is considered.

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3

If someone doesn’t opt for presumptive business income, then also audit will be applicable?

Edit: I am asking because I don’t understand the rationale for tax audit in cases of losses when 100% transaction is digital.

4

Hey @Jayadratha,

If you have not opted for the presumptive taxation scheme in any of the past 5 FYs, an audit is only applicable when your turnover exceeds ₹10Cr.

5

hey @curiousvi ,
If you read the provisions from the Income Tax Act, Tax audit will not be applicable for F&O trading if the transactions are below Rs. 10 crores as per the present provisions. Though ITR-3 and maintenance of books of accounts will be applicable but Audit won’t be applicable. We have done similar for our clients as well. So if there is a loss or profit which is less than 6% of the total turnover, still audit won’t be applicable for F&O trading if the sale is below Rs. 10 crores and doesn’t breach the limit of cash deposit / cash withdrawal as mentioned in sec 44AB of the Act.

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