During AY 2018-19, I suffered losses from F&O trading. I got my P-L audited and filed the return. The Loss was carried forward for future adjustments. During AY 2019-20, I did some F&O trading, but made a net profit (could be less than 8% of the turnover). My income under other heads was more than Rs 2.5 Lakhs. I filed the return while adjusting the C/F loss from the previous year with F&O profit this year. But I did not do a tax audit as the turnover was not more than Rs 1.0 crore (do not know if the tax audit was required ??). During AY 2020-21, I had no F&O trading, but I got the remittance towards settlement of Rs 1.01 crores from the stock broker related to a trade dispute which had been raised for trading in AY 2018-19. This settlement amount wiped out my C/F losses and balance amount is of course subject to tax. I may show some legal expenses, but they are all paid through Bank. My income from other heads exceed Rs 2.5 Lakhs. Do I need a tax audit for AY 2020-21 ? I request answer to my question "if Tax Audit was required to be done in AY 2019-20?" and "If Tax Audit is required to be done in AY 2020-21?".
Hii
if your net profit under business income is less then 6% then you have to audit your books of accounts mandatory
thus for applicability of tax audit check turnover exceeding 2 crores and profit less then 6% in online payment mode (for other then company cases)
for AY 2020-21 please check above rules and you can decide Accordingly
Tax Audit was required in AY 2019-20 as the profit was below 8%.
For AY 2020-21, tax audit will be required if you show profits below 8%.
Dear Sir,
Hope you are doing well !!
Tax audit was required in AY 19-20 as the profit was below 8%.
However, in case of digital receipts, 6% applicable insted of 8%.
As per the changes in the Budget of 2016, businesses with turnover up to Rs 2 crores can opt for presumptive taxation scheme. Earlier this limit was Rs 1 crore. We’ll quickly list down the features of this scheme-
a. Your turnover must be less than Rs 2 crores.
b. Your NET income shall be considered as 8% of your turnover (net income will be considered 6% in case of digital receipts).
c. You don’t have to maintain accounting records.
d. You don’t have to pay advance tax (from FY 16-17, assessee opting for presumptive taxation has to pay 100% advance tax by 15th March of that particular financial year).
e. You don’t have to get your accounting records audited.
f. You can file your tax return in ITR-4 a much shorter and simpler form than ITR-3.
We may assist you in entire procedure.
It is advisable to take a phone consultation for detailed discussion.
Hi
1. For the year 2019 -20 tax audit is required.
2. For the year 2020 _ 21 if you net profit less than 8 % then tax audit is required.
(In case of digital received net income will be 6% .)
Hello,
Regarding A.Y. 2019-20, Tax audit was required if your net profit from the trading was below 6% of the turnover.
For AY 2020-21 also tax audit would be required if you declare net profit below 6%.
I hope this answer satisfies your requirements.
Regards,
CA Hunny Badlani
I didn't understand this remittance.
Is this the pending amount you had with the broker?
Did you show it as receivable from broker?
Please explain this transaction and then I can go ahead.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you
Hi,
if your profit in AY 2019-20 was less than 8% , then you were required to get the accounts audited.
For Ay 2020-21, we need to understand what dispute was it and accordingly that income is business income or income from other sources. Based on that audit will be determined.
