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This query is : Resolved
08 March 2012
sir i consider trading in stk mkt as ma business income from yrs.
in AY 11.12 my turnover is 55 Lac
is it compulsory for me to show 8% net profit or to do audit.
wat if actually i m earning 2% or 40%
can i show ma actual profit which is less den 8 % of T/o without audit
in AY 11.12 my turnover is 55 Lac
is it compulsory for me to show 8% net profit or to do audit.
wat if actually i m earning 2% or 40%
can i show ma actual profit which is less den 8 % of T/o without audit
08 March 2012
first of all, you should know that what is turnover for stock market transactions.
If you are doing only Intra-day trading, then only the Profit/loss of the transactions will be considered as your turnover.
If you are doing Delivery based trading, then the turnover will be your sale amount of share.
Now if your turnover is 55 lacs, then it is mandatory to show 8% profit of turnover to avoid tax audit.
So if your profit is just 2% then you can show 2%, but then you have to get your books audited.
If your profit is 40%, then uyou can show only 8% and avoid audit.
If you are doing only Intra-day trading, then only the Profit/loss of the transactions will be considered as your turnover.
If you are doing Delivery based trading, then the turnover will be your sale amount of share.
Now if your turnover is 55 lacs, then it is mandatory to show 8% profit of turnover to avoid tax audit.
So if your profit is just 2% then you can show 2%, but then you have to get your books audited.
If your profit is 40%, then uyou can show only 8% and avoid audit.
08 March 2012
When your profits is 40%; then you can also show 40% of profits in your return of income.
.
Although you can file your return by showing 8% profits.
.
But when in future you will buy certain assets which are not supporting your income declared; then practically; after some years; the department may raise queries thereon.
.
In such circumstances; the department will not question about your returns filed according to the Income-Tax Law but surely in future they can raise queries :
From which sources you earned huge income without declaring them to the Income Tax Department.
.
Although you can file your return by showing 8% profits.
.
But when in future you will buy certain assets which are not supporting your income declared; then practically; after some years; the department may raise queries thereon.
.
In such circumstances; the department will not question about your returns filed according to the Income-Tax Law but surely in future they can raise queries :
From which sources you earned huge income without declaring them to the Income Tax Department.
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