No speculative business loss only

Dear Sir,

As your turnover from derivatives exceeds the threshold limit of Rs. 1 CR which is the minimum turnover requirement for the audit of the books of accounts. Therefore you are compulsory required to get the audit done.

If the constitution of business is company then you are required to get the books audited under Statutory and Tax Audit. If you are non- company then you are required tax audit as the turnover exceeds Rs. 1 CR.

Tax Audit has a relation with the turnover and not total income.

Thanks

Its necessary to get PL account audited by CA, although you have net loss.

Hi,

In spite of the fact that you have losses, you will still need to get the accounts audited since the total turnover is in excess of Rs. 1 cr.

Regards,

Nikhil.

Dear Sir,

It depends on turnover. In your case it should be between Rs. 10,000-15,000

Thanks

This would vary from CA to CA. However generally the fees is based on the turnover.

Regards,

Nikhil.

Speculative loss can be set off with speculative income only. Non speculative loss can be adjusted with other incomes except salary.

hi,

how you have calculated the turnover of derivatives -

Turnover must be firstly calculated, in the manner explained below:

The total of positive and negative or favourable and unfavourable differences shall be taken as turnover.

Premium received on sale of options is to be included in turnover.

In respect of any reverse trades entered, the difference thereon shall also form part of the turnover.

Here, it makes no difference, whether the difference is positive or negative. All the differences, whether positive or negative are aggregated and the turnover is calculated.

For computation of turnover of futures, the total of positive and negative or favourable and unfavourable differences shall be taken as turnover.

Similar will be the case pertaining to speculation income the total of positive and negative or favourable and unfavourable differences shall be taken as turnover.

So in case your turnover is exceed 1 Cr by above calculation method then you are liable for Tax Audit. otherwise

Tax audit is required under section 44AB- If the assessee claims that his total income is lower than the income deemed under section 44AD ( income is less then 8%) and his total income is chargeable to tax, then he shall have to get his accounts audited under section 44AB and furnish the prescribed report within prescribed time.

following expenses can be claimed under business- Expenses such as postage, conveyance and telephone, incurred for carrying on the business can be claimed as business expenses. You can also claim depreciation on assets used for the business or profession.

for further doubts and clarification please feel free to reach me.

Hi

Since your turnover exceeds Rs.1 crores, audit is mandatory.

The audit fee is not fixed. It shall vary from one CA to other.

No, for both.

The loss from speculative business can be set off against income from speculative business only.

# I assume you know how the turnover for derivatives trading is calculated.

No

Tax audit is mandatory in your case.

Speculation loss can be set off from speculation business income only.

Hi,

Yes, you will still need to get your accounts audited from a CA.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com