Is tax audit applicable in case of F&O transaction
2 years ago
I am resident individual having the following source of income for the AY 21-22
Business income
Non speculative loss- 1,00,000
Speculative profit- 20,000
Income from other sources- Interest from FD- 90,000
I would like to know whether i need to get my account audited u/s 44AB to carry forward the business loss.
Please note that i have not claimed any benefit under section 44AD in any of the preceding previous years even though i was eligible assessee and nor am i planning to opt for section 44AD during this PY as well. Kindly advice
Ayantika Mondal @ Prime Legal
Responded 2 years ago
A.Hi,
As an F&O trader if your turnover does not exceed 2 crores you can choose to declare income at the presumptive rate. Under the new clause, an audit is required only if a taxpayer has declared income at the presumptive rate in any of the previous five years but wants to declare losses or income at less than the presumptive rate in the current year, provided his total income in the current year exceeds the basic exemption limit.
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As an F&O trader if your turnover does not exceed 2 crores you can choose to declare income at the presumptive rate. Under the new clause, an audit is required only if a taxpayer has declared income at the presumptive rate in any of the previous five years but wants to declare losses or income at less than the presumptive rate in the current year, provided his total income in the current year exceeds the basic exemption limit.
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A.Hi,
Upto the year 2016, there was a clause in section 44AD that required a taxpayer to maintain books and get them audited if he declares income less than the presumptive rate or declares losses. In Finance Act 2016 this clause was replaced by a new clause. Under the new clause, audit is required only if a taxpayer has declared income at the presumptive rate in any of the previous five years but wants to declare losses or income at less than the presumptive rate in the current year, provided his total income in the current year exceeds the basic exemption limit.
Please rate my answer
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Upto the year 2016, there was a clause in section 44AD that required a taxpayer to maintain books and get them audited if he declares income less than the presumptive rate or declares losses. In Finance Act 2016 this clause was replaced by a new clause. Under the new clause, audit is required only if a taxpayer has declared income at the presumptive rate in any of the previous five years but wants to declare losses or income at less than the presumptive rate in the current year, provided his total income in the current year exceeds the basic exemption limit.
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