Intraday trading

This query is : Resolved

ASHISH (Querist)
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15 July 2018 I have short term capital gain of Rs 50000 on a SALE turnover of Rs 50 lakh
and intraday profit of Rs 110000 on a sale turnover of 10 lakh and a long term capital gain profit of Rs 40000
should i show this profit under the head capital gain
or as business income if shown as business income what books will i have to maintain

Nikhil Kaushik

Nikhil Kaushik (Expert)
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15 July 2018 intraday is to be shown as business income. rest is capital gains.

ASHISH

ASHISH (Querist)
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18 July 2018 do i have to keep any books of accounts for business income of Rs 50000
is audit also required

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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01 August 2024 For intraday trading where you have a business income of Rs 50,000, here's what you need to know about keeping books of accounts and audit requirements:

### **Books of Accounts**

**Requirement:**
- **Maintain Books of Accounts:** Even if your income is below Rs 2.5 lakhs, it's advisable to maintain proper books of accounts for intraday trading. This is important for accurate record-keeping, tax filing, and if you need to substantiate your claims in case of a tax audit.
- **Records to Maintain:** Keep track of all trades, including purchase and sale details, amounts, dates, broker charges, and any other relevant information. Ensure that you have a record of all your trading activities.

**Why Maintain Books:**
- **Accurate Reporting:** Proper records help in accurate calculation of profits and losses.
- **Tax Compliance:** Maintaining books ensures compliance with tax regulations and helps in providing documentation if needed.

### **Audit Requirements**

**Audit Threshold:**
- **Tax Audit under Section 44AB:** A tax audit is required if your gross receipts from intraday trading exceed Rs 1 crore in a financial year. Since your income is Rs 50,000, you are below this threshold.
- **Provisions under Section 44AB:** If your trading activity falls under the definition of “business” and if your turnover exceeds Rs 1 crore, you would need to get your accounts audited.

**Other Considerations:**
- **Voluntary Audit:** Even if your turnover is below the audit threshold, you may opt for a voluntary audit if you want to ensure your accounts are accurately maintained and compliant.
- **Filing Requirements:** Ensure timely and accurate filing of your income tax returns. Report intraday trading income under “Income from Business or Profession” in your return.

### **Summary**

1. **Maintain Books of Accounts:** Even though you are not legally required to do so for an income of Rs 50,000, it is highly recommended to keep detailed records of your trading activities for accurate tax reporting and future reference.

2. **Audit Requirement:** With a business income of Rs 50,000, you do not need a tax audit as you are below the Rs 1 crore threshold. However, ensure all your trading activities are well-documented and reported accurately in your tax return.

3. **Compliance:** Adhere to tax filing deadlines and maintain accurate records to support your tax filings.

If you have any specific concerns or if your situation changes, consulting a tax professional or financial advisor can provide tailored advice based on your individual circumstances.