Tax Audit vs Capital gain

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Anoop kumar Modi (Querist)
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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.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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19 September 2008 I feel that your share transactions may be considered under the head business. If so section 44AB applies.

Anoop kumar Modi

Anoop kumar Modi (Querist)
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19 September 2008 Thank you for your reply. But still I am not 100% sure.
thanks again

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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

Jitender

Jitender (Expert)
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19 September 2008 tax audit is required if turnover or receipt exceeds 40 lac in case of business.

A.Sekar

A.Sekar (Expert)
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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

Advocate Vivek Kumar Sancheti

Advocate Vivek Kumar Sancheti (Expert)
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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"