Are You Covered Under Tax Audit

[aja]

True but it is very clear from the government income tax site that audit is NOT necessary if prifit is less than 8% and is less than tax exemption limit.

and if profit is greater than 8% then also audit is not required.

As soon as 2Crs mark is breached audit is compulsory irrespective of Profit or Loss.

 

[aja]

The strange part in above discussion is-
When headstrong bhai is making good money,paying a tax and his CA is very reputed then I wonder why his CA misguided him on audit part?(he knows loopholes thats the different part)
A well known CA will always go for audit.And even a local struggling CA will also recommend an audit when you breach 2Crs mark.

 

[wisp]

The strange part in above discussion is-
When headstrong bhai is making good money,paying a tax and his CA is very reputed then I wonder why his CA misguided him on audit part?(he knows loopholes thats the different part)
A well known CA will always go for audit.And even a local struggling CA will also recommend an audit when you breach 2Crs mark.

Nothing strange, the point is not about the money but to know what the government wants of us.

The links i have given are from the incometax.gov.in site and clear illustrations have been given with examples. Now each can decide what they want to do.

 

[traderniftybull]

What is the cost of audit per year that we should try to avoid audit? Last year for me it was 10 thousand, why any good profit making trader avoid Audit for 10 k?

The question here (about compulsory audit) is not about good profit making traders but about the traders who are either in loss or in meager profits.

BTW, do not compare yourself with other low profit making traders, you are making lakhs per week, so for you spending 10K on audit is peanuts.

 

[Vipul_84]

In case of conflicting views we should err on the safer side :thumb:
This is applicable for trading as well

Your CA is clearly misleading you and you are keeping a blind faith on him.It is you who will face the music in scrutiny, not your CA. Your CA is going to charge you extra 15-20 K for handling scrutiny case and it is extra business for him. If you are paying taxes in Lakhs of rupees then why avoid audit and save 10-15 K more and depend on good intention of your CA,IT department and Narendra Modi ?In case of conflicting views we should err on the safer side.

The first question my CA asks when I go to him is whether my Turnover is above Rs 2 cr...

Smart_trade

 

[canikhil]

Nikhil Sir

FM in his budget speech announced a presumptive scheme of 6% (instead of 8% at present) for traders, who use digital (online) means only (something like this). Is this scheme applicable to FnO traders also, as we FnO traders use only online means for our trading. Can you please post details about this. Thanks

It should apply to F&O traders.

 

[canikhil]

Nikhil Sir, Please reply.

non-speculative business losses ie futures and options loss can be set off against any other income except for salary, income from lottery, gambling, horse racing etc. So you can set it off against house property income (commercial as well as residential) interest income, capital gains etc.

 

[canikhil]

Hi,

I did not make any profit this financial year. I do not have any other source of income. Should I file my returns?

whats your turnover?

 

[canikhil]

Okey ...you are in loss so why you need audit etc?

I think we again wait for nikhilji's reply

here is my take on it:

legally you are not required to file the tax return. But would strongly advise you to file the return. Don't think audit is required in your case (I am assuming you don't have any other income from salary, house property and interest)

 

[canikhil]

Dear Nikhilji,
If our turnover below 1CR and negative profit(loss) then too this below 8% profit of turnover apply.. need to audit?....here i mean our overall amount otherthan trading is above tax limit(2.5Lak).

In case you have salary income in excess of Rs 2.5 lakhs, then audit will become applicable with given facts shared by you.