Tax Audit vs Capital gain
This query is : Resolved
19 September 2008
I am in job and also doing trading in shares. My yearly purchases is around Rs.50 lacs ( around 80 transactions) and sales is also Rs. 52 lacs having equall no. of transactions. Am I liable for Tax Audit u/s44AB or the whole thing will go into capital gain?
Please light me on the issue.
Please light me on the issue.
19 September 2008
I feel that your share transactions may be considered under the head business. If so section 44AB applies.
19 September 2008
Thank you for your reply. But still I am not 100% sure.
thanks again
thanks again
Guest
Guest
(Expert)
19 September 2008
Yes you have to get your accounts audited if the transaction of more than Rs. 40lacs are in Delivery based mode.
As the same will be considered as business income.
Rohit
As the same will be considered as business income.
Rohit
19 September 2008
tax audit is required if turnover or receipt exceeds 40 lac in case of business.
20 September 2008
Please refer to the CBDT circular on investor vs trader. Based on the circular, if you are treated as trader, tax audit would apply as the income would be taxable under the head business
20 September 2008
Sir,if you treat your dealings in shares as business dealings then the provisions contained in section 44AB will apply and,therefore,you will be required to audit your books of account.But if you treat your purchasing of shares is investment then if you sell them within 12 months from the date of purchase,then it will be taxable as short term capital gain or short term capital loss under the heading"Income from capital gains"
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