I received a notice u/s 143(2) from IT department. Which is as follows:
Subject: Limited scrutiny
This is for your kind information that the return of income for AY 2015-16 filed via ack No. xxxxx on xxxxx has been selected for scrutiny. Following issues have been identified for examination:
1. Securities transaction
I have been asked to send in supporting evidence by 19, August, 2016. I am in Delhi NCR.
During the year for which this return was filed, I was trading both in delivery segment for equities as well as in F&O segment. I had some rental income from a property as well as income from interest on bank fixed deposits.
All applicable tax on rental income as well as bank FDs was paid by me and is mentioned in return.
I made some profits in delivery segment and paid short term capital gain on that amount. The losses that were booked in F&O segment were not declared in the return and were not carried forward as I am no longer trading in F&O and trading very less in delivery segment, so probably will not have profits to set off against the old losses.
Now I have 2 questions:
1. Given that the notice is titled "Limited scrutiny" and it also mentions "Securities transaction", can the IT officer ask to verify all the F&O transactions also? Can I assume that the IT officer will not go beyond my trades in delivery segment?
2. Will he look into my rental income and bank FDs also and also look into the source of funds for buying rental property in 2009 or bank FDs that were made in 2011?
Please note that Derivatives or Futures and options is not mentioned in the notice that I have received.
I wonder how many documents from the past I have to collect...