@Quicko@San78@TAXIQ.IN@Taxreturns
For year 2020-21 financial year which ended on march 31 2021. I had intraday turnover was 1,20,935 and Gross profit on intraday was 91k (Please note its gross profit - have not deducted any expenses in this figure)
and FNO turnover was about 60 lac’ and Gross profit from FNO was only 65k in profit which is way less than 6% of turnover.
For equity delivery trades (short term gain) turnover was about 1 crore which I am not willing to add as trading turnover or business income as I would like to treat as capital gains.
Also, in zerodha PNL excel sheet it shows combined expenses for equity delivery trades and intraday trades - how do we find out what expenses are only for intraday trades? We can see brokerage separately but what about other charges like STT …stamp duty etc?
Audit u/s 44AB shall be applicable when turnover exceeds the limit INR 10 Crores from AY 21-22 if the cash receipts and payments don’t exceed 5% of total cash receipt & payments.
In your case, the turnover is Rs 61,20,935 and you have profit less than 6%, if you have opted out of the presumptive scheme u/s 44AD then Tax Audit shall be applicable. However, if you have not opted for the 44AD presumptive scheme, then considering your scenario tax audit is not applicable.
As regards the Capital Gains, those are not added as business income and the same are assessed under separate head of “Income from Capital Gains”.
As regards the charges in Zerodha PNL sheet, the same are combined and you need to claim proportionate expenses for Intraday. You need to make the proportions on a reasonable basis and claim the respective amount.
I think you meant to say if I have used 44AD, in previous year to avoid audit and this year I am opting out than tax audit will be applicable but in my case this is the first year where we have business(trading) income so there is no question of opting out or opting in …so now tell me do I need tax audit? again total T/O is less than 1 crore and gross profit is about 156k (which is way less than 6%)
I just checked this link where your cellarage Sakshi Shah says about up to 2 crore of trading turnover
Tax Audit of Trading Income – AY 2021-22 Onwards
Trading Turnover up to INR 2 Cr
Tax Audit as per Sec 44AB(e) is applicable if there is loss or profit is less than 6% of Trading Turnover and total income exceeds the basic exemption limit.
You are saying up to 10 crore - 44ab audit not applicable but Sakshi says - up to 2 crore and profit less than 6% - under 44ABe - audit applicable - WHY TWO CONFLCLICTING VIEWS FROM SAME COMPANY? @Sakshi_Shah
To determine the tax audit applicability, the clause mentioned above is an additional condition that is to be checked. If this is the first year where you have business(trading) income and you are not opting for section 44AD then Tax Audit is not applicable mandatorily.
Moreover, The intention of not mentioning this clause in the article was to make the article simpler and easy for readers to understand. Also, we have clarified the applicability of this clause multiple times in the comments section of the article. If you need any help to determine tax audit applicability you can write back to us at [email protected] and our tax experts will help you with the same.