23 June 2023
Background: I have a proprietorship business with Annual turnover of around 30 lakh and profit around 5L ( after business expense / depreciation and all other deduction).
This week i started doing intraday trades
Details Absolute turnover: 13000 Loss: 200
what if i stop now? Is audit compulsory in that case?
Also Let us suppose i make similar trade in 52 weeks in an year.
My absolute turnover would be : 6,76,000 Loss: -10,400
Thank you for your response. Can you share when this tax audit becomes compulsory?
Is it when profit from my regular business and intraday activities becomes less than 8%?
Because everywhere it says if profit less than 6% for intrday ( ATO< 10cr),audit is compulsory. Is that for people who only do itraday or salaried employee plus intrday?.
Thankyou for your time and apologies for bugging you again. I am very confused.
23 June 2023
There are different factors for tax audit to be mandatory like aggregate turnover exceeding Rs. 1Cr with cash transactions more than 5%; otherwise Rs. 10Crs would be the limit. In case you had opted sec. 44AD in any preceding 5 years than it needs to be check whether 6/8% profit margin maintained or not. If not, tax audit liability arises.
I check my last ITR and it was ITR 4 and as per my understanding the CA must have opted for sec44AD. Is this correct assumption?
As i have done intraday this month so next time I have to file return using ITR-3.
If my regular business turnover + intraday turnover is less than 1 cr, as per my understanding i can still opt for sec44ad but under ITR 3 now.
And if my total profit from business and intarday is greater than 6% (all my regular business payment are through cheque or neft) of total turnover, I need not worry about audit.
I dont have to consider intraday loss and turnover separately.
Plea
So if I am able to do similar regular businesses this year which i did last year which is
Turnover: 30L Profit:5L Profit percentage from regular business: 16.66%
and along with that this time by the end of year i have intraday turnover of 30 L , with zero profit or loss.
Net profit percentage: 8.33%
Still i can claim sec44ad, without any need for audit?
24 June 2023
You can file ITR 3 or 4 but need to file under sec. 44AD IT act. ITR 3 if there is any capital gains along with business income, otherwise ITR 4. Once you declare business+ intraday trading income under sec 44AD (till business TO 3Crs, cash transaction less than 5%, otherwise 2Crs.) tax audit will not apply.
CAclubindia
