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Is this tax audit?

Sai Prasadh (Investment advisor) (139 Points)

26 December 2014

Dear Reader

If I Purchase Share worth 2 Crore and Sell Share woth 2.10 Crore In National Stock Exchange.Do I come Under Tax Audit U/s 44AB?

CG :Short Term Capital Gain

Thanks

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6 Replies

Kavyaa (Budding CA) (107 Points)
Replied 26 December 2014

Tax audit is for persons having income from business or profession.

If you are having only income from capital gain, you are not subject to tax audit u/s 44AB.

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CA ANKUSH AGGARWAL (CHARTERED ACCOUNTANT) (2782 Points)
Replied 26 December 2014

Originally posted by : Kavyaa Gunalan
	Tax audit is for persons having income from business or profession. If you are having only income from capital gain, you are not subject to tax audit u/s 44AB.

Hemanth Pullanikkat (Chartered Accountant) (89 Points)
Replied 26 December 2014

From the Act

According to section 44AB of the Income Tax Act 1961 " In the case of any person

a) Carrying on business where the total sales, turnover or gross receipts exceeds Rs.1 crore in the previous year.

b) carrying on any business referred to in section 44AD and claiming his income from such business to be lower than the income prescribed u/s 44AD and during such year his income exceeds the basic exemption limit.

In this case you decided that your income will come under the head "Capital Gains". Section 44AB will not invoke in cases of capital gains.So tax audit is not applicable to you.

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sanketh (Accountant) (29 Points)
Replied 27 December 2014

What is Turnover Limit for a travel agent for getting his books audited? is it total sales or total commission?

Kavyaa (Budding CA) (107 Points)
Replied 27 December 2014

It will be noted that the provision relating to tax audit applies to every
person carrying on business, if his total sales, turnover or gross receipts in
business exceed the prescribed limit (Rs.1 crore w.e.f. A.Y. 2013-14)

What is Gross Receipt?

In the case of a travelling agent, the amount received from the clients
for payment to the airlines, railways etc. where such amounts are
received by way of reimbursement of expenses incurred on behalf of
the client. If, however, the travel agent is conducting a package tour
and charges a consolidated sum for transportation, boarding and
lodging and other facilities, then the amount received from the
members of group tour should form part of gross receipts;

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CA Vap Patel (Practice) (1205 Points)
Replied 28 December 2014

ICAI has specifically provided in its guideline that in case of share trading business, turnover limit for section 44AB is to be determined based on profit or loss. So if your profit + loss exceed limit of Rs 1 corer then only tax audit will be applied.

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