Tax audit - taxable income

No, tax audit is applicable in case of the assessee business income is more than 1 crore so in your case tax audit is not applicable.

Thank you.

@ V.K.Iyer:

Please provide further details as to

Futures turnover I.e the positive and negative differences. 

Intra day turnover I.e the positive and negative differences

Speculative turnover in case of ICICI direct.

Please note Futures turnover and intraday day turnover are to be considered separately as intra day is speculative business and futures is assessed as business income.

Needless to say 44AD cannot be availed as your income exceeds basic exemption limit of 250000/-

Also books are required to be maintained u/s 44AA

Thank you sir. I have taken futures and intraday figures seperately only.

Hi VK Iyer Sir,

You are required to maintain books of accounts as per Sec 44 AA and get your accounts audited U/s 44AB and it is mandatory as you are hit by section 44AD as your turonver from trading is less than 1 crore and your taxable income is less than 8% of the total turnover from trading.

Thus you are mandatorily required to get tax audit done. Though you are not hit by sec 44AA or 44AB , but you are hit by section 44AD.

Regards 

Karthik V Kulkarni

@ VK IYER:

If you want to claim loss on intraday business and want to set it forward in future years then tax audit will be applicable as per Sec 44AD. You mentioned only share trading (presuming only intra day) turnover and not the futures turnover. Hence that question was asked

@ Karthik Kulkarni:

Sec 44AD is always rw Sec 44AA and Sec 44AB together. When you are talking about tax audit to be done means you are talking wrt Sec 44AB. Although such tax audit is not because of turnover/gross receipts but due to Sec 44AD/Sec 44AE.

Thank you very much. The turnover of futures is around Rs3,00,000 approximately. (all the gain transaction amount + all loss transaction amount taken as positve added together) as the loss in intraday is less only I am not interested in carry forward of the same.

if I cannot file the tax audit return within due date what will be my prsumprive tax burden from the above figures?

I have one more question.

Say I hold 100 shares of Airtel in my demat account. I go for intraday trading(margin)  buy 500 shares of Airtel and squar off the same in that day itself. I pay intraday brokerage only. whether FIFO will be applicable in this case?

No FIFO method won't be applicable. 100 shares held will be either treated as stock in trade or as an invt. Whereas 500 shares traded intra day will be treated separately and will be a speculative business. Here is the situation for which I said that books need to be separately maintain.

It is advisable to go for tax audit as the tax amt crosses beyond 30K + interest will be levied on the same whereas if you opt for tax audit, the fees will be far less.  The tax audit fees alongwith filing of return will cost you around 20k. Also you would be eligible to carry forward the loss and set off the losses in future years.

Aren't you having any subscripttion made to lic policy or ppf subscripttion or deferred annuity in the name of you, your spouse or your child or NSC investment made. Because the 80C deduction that you have specified is only with regards to tuition fees component in it and admission fees are not eligible for the same. Aren't you having any mediclaim of your family. Because that will reduce your tax burden. 

@ Rinkal,

Sorry for reading wrongly into my comments. Its a known fact that tax audit means wrt Sec 44AB, and what i am talking about is why the tax audit requirement arised. I have nowhere mentioned that tax audit should be done u/s 44AD , i have only mentioned that as the assessee is hit by 44AD as consequence he is liable for tax auidt u/s 44AB. Thank you for replying.

@ Karthik Kulkarni:

No you took my statement wrong. I never told that tax has to be done u/s 44AD. What I meant was Sec 44AD has to be collectively rw Sec 44AB and sec 44AA, and not individually. 

My point was wrt the 2nd para that you stated regarding tax audit to be done because of sec 44AD and not because of sec 44AB. I.e you said " NOT HIT BY SEC 44AA OR SEC 44AB BUT HIT BY SEC 44AD"

It is definitely hit by Sec 44AB automatically when you say that tax audit is required to be done

You could rather say that tax audit is required to be done u/s 44AB as a result of sec 44AD. 

NEEDLESS TO SAY, in the present case it rests upon the assessee whether to declare the income below the presumptive rate or not. Even if the assessee has lower income than the presumptive rate of 8%, then too it rests upon the assessee whether to show / declare lower income and get the books audited or show 8% income and avoid maintainence of books and get them audited

I was ignorant. I did not make any arrangement for claims under 80c etc. to my bad luck my auditor told me that in my case i can file return using itr 4 without tax audit. He says that he is ACA. 

Yes you can very well do so as suggested by your CA. But you need to check out whether getting auditing is good for you or foregoing your loss and paying tax , which one of it is beneficial for you?

That is 2 way computations are to be prepared. One way is by auditing and claiming the actual profit/loss and to carry forward the loss to future years. And second way is by not auditing and calculating profits @ 8% of the respective turnovers and paying tax on them.

Needless to say in whatever case least expense incurs has to be opted.

What I mean to say is in my case, the auditor told me that  I can file itr 4 without paying presumptive tax or doing tax audit.

Now I am almost clear that there is no such  way. However a debate in this is welcome.

If due date extended for Tax Audit return I will certainly try for submission of Audited return only. ACA with real knowledge of IT act are getting lesser. Most of other Tax consultants."donkeys".