Audit of accounts for stock traders
Querist : Anonymous
Please help urgently, letter for non filing of ITR received.
In AY 2011-12,total turnover in stock trading was as -
Intraday Trading-1.5 lac
Delivery trades-15 lacs
Profit/loss
Intraday Trading- loss of 31 thousands
Delivery trades- profit of 20 thousands
Total Income (from rent and bank interest) was Rs. 1.10 lacs.
No ledger,books were kept only record of buy/sell price & quantity and net loss/profit was maintained and no audit was done.
Under which section 44AB or 44AD income should be shown so that need for maintaining books and getting audit done does not arise ?
Thanks
Income should be shown under section 44AD ,which (if all conditions satisfied) does not require to mantain books of accounts
Querist : Anonymous
Assessee is an individual.
What are the conditions under 44AD which does not require to maintain books of accounts?
Does an individual need to get audit done under section 44AD if he incurred losses or profits below 8% of turnover (total income for the year below tax limit) ?
Querist : Anonymous
If an assessee did not maintain books of accounts and hence did not get the accounts audited, is there a way to avoid consequences of not getting the audit done ?
If presumptive income (Rs 1.3 lacs) is declared than it will be added to rental income(1.2 lacs) and total income will be 2.5 lacs and hence case of tax avoidance arises. AY is 2011-12
Querist : Anonymous
The query is regarding AY 2011-12.
No tax was paid and no return was filed as total income was only 1.2 lacs.
Now notice is received for non filing of return. Reason for notice may be turnover of delivery trades.
Now to file the return CA has advised to fill ITR 4 and show share trading as business. The income on share trading business is below 8% of turnover and audit was not done. So if presumptive income is shown than total income will be 2.5 lacs for AY 2011-12 but no tax was paid in that year.
If presumptive income is not shown than penalty for not getting the audit has to be paid.
so in your opinion what is the way out in this situation ?
2) Audit is also required if profit shown less than 8% of turnover as per provisions of section 44AD
In your case if profit under presumptive taxation comes to Rs 2.50 lac that means total turnover is 3125000 ,i.e lower than 60 lakhs.
File ITR-4 ,as no tax audit is required ,even without filing return ,on plain paper just submit computation showing actual income i.e Rs 1.20 lacs explaining that total income is below taxable limit ,hence not filing retrn , assessing officer will definately be satisfied
Thereafter no penalty would be levied and no taxability arises.
Querist : Anonymous
Sir my CA is insisting on filing a return in response to the letter from IT Dept. for non filing.
Can you please tell me the conditions under which a person has to compulsorily file a return even if total income is below tax limit ?
in which AO can demand return of income to filed ,otherwise there is no necessity to file return if income is below taxable limit, but this fact should be explained reasonably to the satisfaction of AO.
As per the details furnished by you there is neither Tax audit applicable nor notice u/s 142(1) etc is issued ,so no need to file return.
However it is recommended if the same transactions to be continued in future then you MUST file return
Therefore satisfactory reply of notice even without filing return is enough compliance.
If anyone still not satisfied ,kindly refer me the section under which notice has been furnished.
Hope I am clear
Querist : Anonymous
CAClub is a wonderfully useful site to consult about taxation and other related matters.
Thanks again for the discussion above.
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