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Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2014 Sir,
I am a self employed legal professional and I have started trading in equity and derivatives since FY2012-13. I have only losses to show in trading .I have gathered all trading documents from my brokers and have computed my loss and other expenses like STT,ST,Tr. charges,Stamp etc. NOW, my question is

Q 1)WHICH ITR FORM TO USE IN MY CASE? ITR4 OR ITRS

Q 2)IF I SHOW LOSSES AM I REQUIRED TO GET MY ACCOUNTS AUDITED(MY TURNOVER IS BELOW 60 LACS)?ALSO IF I SHOW LOSSES WHICH ITR TO USE ITR4 OR ITRS

THANKS IN ADV.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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05 January 2014 1) ITR4

2) AUDIT NOT REQUIRED PROVIDED TOTAL OF PROFIT AND OR LOSS DOES NOT EXCEED RS 100 LACS. TAX AUDIT LIMIT FROM FY 2012-13 ONWARDS IS RS 1 CRORE AND NOT RS 60 LACS

Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2014 Dear Sanjay Sir,
From AY 2011-12, all businesses including the business of trading in the markets was brought under the purview of section 44AD. What this section says is that if your turnover is less than Rs 1 crore and if your profit is less than 8 per cent, then you will have to get your books audited by a chartered accountant. Please clarify in this regard.
Thanks in advance

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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06 January 2014 If you show losses then you are liable for audit u/s 44AB as trading in shares and derivative is business. Hence if you show profit of less than 8% you are liable for audit under u/s 44AB. So if your books of accounts are audited you wil be liable for filing ITR 4. In case you are showing preseumptive income of 8% then you are liable for filing of ITR 4S.

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Querist : Anonymous

Querist : Anonymous (Querist)

06 January 2014 Dear Experts,
I have turnover of 38 lac in FY 2011-12 and trading losses of 1.52 lac approx. in both equity and derivatives. I was not aware of sec 44AD. I have professional income of 2.12 Lac. What should I do ? Can one get accounts audited in belated filing also? If not what's the option left? What's the penalty for non audit of accounts? I heard its 1.5 lacs. If that is true shouldn't I show 8% profit and give tax on it.Kindly guide me.

THANKS IN ADVANCE

Aditya Maheshwari

Aditya Maheshwari (Expert)
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07 January 2014 Penalty if 0.5% of turnover or Rs. 1.5 lakhs whichever is lower.

So you can decide based whichever option is more beneficial to you whether its better to get audited u/s 44AB and claim the loss or to show profit @ 8% and file return without getting audited depending upon the tax and penalty as mentioned above.