Fire your tax related queries and i would get it solved!!!

[john302928]

Hi Canikhil
If we have derivative loss of 3lk and STCG as 50k and no other source of income and we are carryforwarding the losses to next years.
1.Here If we consider STCG as business then should we mention STCG income separately and derivative loss separately in ITR though net income will be adjusted to each other or we can simply say business loss of 2.5 lak (3lk-50k) and no need to mention STCG anywhere? I am asking about mentioning of income from STCG anywhere in ITR seperately for this case or not
2. Since we are considering STCG as business we can also consider STT as expenses. right?
Please help to understand this. Thanks

 

[kcsusha]

I think turnover limit is Rs 1 crore only if reported under 44AB. Rs 2 crores is applicable only under
44AD where presumptive tax is reported. Under this section they have stipulated that if business income
reported is less than 8% of turnover, tax audit is a must. If income is reported above 8%, tax audit
is not necessary. Hope I am not wrong.

 

[canikhil]

I think turnover limit is Rs 1 crore only if reported under 44AB. Rs 2 crores is applicable only under
44AD where presumptive tax is reported. Under this section they have stipulated that if business income
reported is less than 8% of turnover, tax audit is a must. If income is reported above 8%, tax audit
is not necessary. Hope I am not wrong.

plus you need to look at the condition of Income below or above exempted limit.

 

[canikhil]

Hi Canikhil
If we have derivative loss of 3lk and STCG as 50k and no other source of income and we are carryforwarding the losses to next years.
1.Here If we consider STCG as business then should we mention STCG income separately and derivative loss separately in ITR though net income will be adjusted to each other or we can simply say business loss of 2.5 lak (3lk-50k) and no need to mention STCG anywhere? I am asking about mentioning of income from STCG anywhere in ITR seperately for this case or not
2. Since we are considering STCG as business we can also consider STT as expenses. right?
Please help to understand this. Thanks

I would not advise treating Short term capital transactions as business transactions. The net effect is significantly tax inefficient in the years of gains.

 

[canikhil]

What if total income is below taxable limit? then is Audit necessary ?

have answered elsewhere. please check my earlier posts and let me know if you still have any doubt/query.

 

[john302928]

I would not advise treating Short term capital transactions as business transactions. The net effect is significantly tax inefficient in the years of gains.

Thank you for your suggestions. But I wanted to know if we treat STCG as business then whether do we need to show STCG in STCG column or we can just club it with rest of the activities as business income? because we cant claim STT as expenses if we treat as STCG but we can , if we show it as business.I would really be thankful if you could answer to that.thanks

 

[kcsusha]

I think so long as income including business income is less than taxation exemption limit i.e Rs 2.5 lakhs
and turnover is less than Rs 1 crore, no tax audit may be required. Once the income exceeds exemption
limit, even if turnover does not exceed Rs 1 crore under sec 44AB, they may insist on tax audit under sec 44AB
read alongwith sec 44AD. I hope this is the correct position.

 

[Probability]

From below my understanding is Audit is not required if F&O turnover is below 2 crore, and Annual income from all source is less than exemption limit.
With this losses can also be carry forwarded without audit.

Please confirm if my understanding is correct

understanding is

 

[canikhil]

From below my understanding is Audit is not required if F&O turnover is below 2 crore, and Annual income from all source is less than exemption limit.
With this losses can also be carry forwarded without audit.

Please confirm if my understanding is correct



View attachment 27034 understanding is

I have covered these issues earlier in several posts. I do not understand why people keep confusing themselves:

1. For all practical purpose, if the turnover is below 1 cr and the income is below exempted limit, there is no need for audit.

2. If the turnover is above 1 cr, and you wish to claim losses, the income tax department will ask you to do an audit regardless of income level. Why so, because the 44AB limits trigger at 1 cr itself. (This is a bad drafting of law but you will not be able to file a return without audit where turnover is between 1 to 2 cr without an audit.

 

[FnOtrader80]

I don't understand why so many fellow traders are apprehensive / hesitant to get audit done and finding ways to avoid it. Audit will ensure some peace of mind if not all if your return comes under scrutiny and as for the cost please consider it as a cost of doing business which anyways you can treat as a expense.