Is speculation business (f&o) covered under 44ad?

This query is : Resolved

Krishna (Querist)
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05 July 2012 Almost all discussions I have seen indicate that the Speculative Business (Profit/Loss on Share Trading under F&O) qualifies as an eligible business under Sec 44AD, if less than 60L in turnover.

However, the Form 6S for easier 44AD Return Filing, states that the Business of Speculation is NOT COVERED under that.

What is the correct status? Please help!!

Kaushik Vinod

Kaushik Vinod (Expert)
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06 July 2012 It is no where mention in 44AD that it is not applicable on Speculative business .
The exception of 44AD are as follows :-

The provisions of this section, notwithstanding anything contained in the foregoing provisions, shall not apply to—
(i) a person carrying on profession as referred to in sub-section (1) of section 44AA;
(ii) a person earning income in the nature of commission or brokerage; or
(iii) a person carrying on any agency business.]

(iv)the business of plying, hiring or leasing goods carriages referred to in section 44AE; and
(V) whose total turnover or gross receipts in the previous year does not exceed an amount of 44a[45[sixty lakh rupees]].]

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Kaushik Vinod

Kaushik Vinod (Expert)
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06 July 2012 In Point (V) please read bu ignoring No.

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Krishna

Krishna (Querist)
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06 July 2012 Dear Vinod ji, Thank you for confirming that Speculation Business (F&O) is eligible u/s 44AD. My confusion is arising from the Instructions for Form ITR4S (Sugam)- the simpler form for 44AD filing- where its says that the ITR 4S CAN NOT be used for Speculative Business.

I'll take it that this denial is only for purpose of filing Return in 4S, and that Speculation Business Income can be filed under Sec 44AD but using the regulat Form 4.

Would appreciate your comments on this, if any. Thanks again.

CA UMESHKUMAR R. ACHARYA

CA UMESHKUMAR R. ACHARYA (Expert)
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18 July 2012
F & O business is totally different than normal business activity because here there

is no purchase or sales or delivery.

So in My opinion same is not covered
under Section 44ad.

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