Are You Covered Under Tax Audit

[canikhil]

Dear Nikhil,

what about this situation

well Ideally this may attracts audit. it would be great if you could indicate the approximate turnover for a better advise. and sorry for the delay.

 

[eku]

Dear Eku,

Well I won't comment on this but would say that often CAs are themselves hired like cheap labors!

anyways, even if the CA has made the mistake, I would suggest that you kindly file a revised return at the earliest.

the status showing-ITR V received after the due date..That means its not proceeded yet..do I still need to file a revised return

 

[canikhil]

the status showing-ITR V received after the due date..That means its not proceeded yet..do I still need to file a revised return

ITRV Received after due date means that it won't be processed. So unless you don't file revised return, it is as good as no filing has been done by you.

 

[gundiravi]

Dear Sir,

gone through your posts and many thanks for your services.

kindly go through my problem and advise me.

I have been trading in my mother's and wife's accounts for the last 5 and 2 years respectively.
My mother is a pensioner with pension below tax limit and wife is house wife with no income.
I have incurred losses only in both accounts hence didn't file return in either case.

But during 13-14 I bought a car for 6 lac in my wife's name and few days back got a non statutory notice to explain why return is not filed for fy 13-14 . ( not done any trading in her account during 13-14)
I have replied in compliance mode stating no Taxable income.
But ever since that notice I am worried that I may get notice for the trading volumes in my mother and wife's accounts. To get buy peace of mind even though they have no taxable income I feel it better to file delayed return for my mother for fy 13-14 and 14-15 and for my wife's account for 14-15.
Kindly clarify whether i can file delayed return for 13-14 as well.
The details of the two accounts are as under, kindly go through and advise whether I should file the return or not necessary. Since filling ITR 4 is cumbersome can you kindly help in filing the return?


Case1.: Mothers Account: Pensioner.
F.Y 13-14 : Pension : 1.5 lac Trading volume : 20 lac Equity short term and 2 lac in Options.
Loss in equity short term : 35,000 and loss in options : 10,000 Total loss: 45,000

F.Y 14-15 : Pension : 2.2 lac Trading volume : 32 lac Equity short term and 12 lac in Options.
Loss in equity short term : 20,000 and loss in options : 18,000 Total loss: 38,000

Case 2.: Wife's Account : House wife No income.
F.y13-14 : No trading

F.y 14-15 : Trading volume : 4 lac Equity short term and 19 lac in Options.
Profit in equity short term : 4,500 and loss in options : 1,66,000 Total loss: 1,61,500

can I file itr 4s in my wife's case as 8% of total trading volume is below taxable income ?
Kindly advise early as I am very worried and not able to sleep peacefully.

 

[canikhil]

Dear Sir,

gone through your posts and many thanks for your services.

kindly go through my problem and advise me.

I have been trading in my mother's and wife's accounts for the last 5 and 2 years respectively.
My mother is a pensioner with pension below tax limit and wife is house wife with no income.
I have incurred losses only in both accounts hence didn't file return in either case.

But during 13-14 I bought a car for 6 lac in my wife's name and few days back got a non statutory notice to explain why return is not filed for fy 13-14 . ( not done any trading in her account during 13-14)
I have replied in compliance mode stating no Taxable income.
But ever since that notice I am worried that I may get notice for the trading volumes in my mother and wife's accounts. To get buy peace of mind even though they have no taxable income I feel it better to file delayed return for my mother for fy 13-14 and 14-15 and for my wife's account for 14-15.
Kindly clarify whether i can file delayed return for 13-14 as well.
The details of the two accounts are as under, kindly go through and advise whether I should file the return or not necessary. Since filling ITR 4 is cumbersome can you kindly help in filing the return?


Case1.: Mothers Account: Pensioner.
F.Y 13-14 : Pension : 1.5 lac Trading volume : 20 lac Equity short term and 2 lac in Options.
Loss in equity short term : 35,000 and loss in options : 10,000 Total loss: 45,000

F.Y 14-15 : Pension : 2.2 lac Trading volume : 32 lac Equity short term and 12 lac in Options.
Loss in equity short term : 20,000 and loss in options : 18,000 Total loss: 38,000

Case 2.: Wife's Account : House wife No income.
F.y13-14 : No trading

F.y 14-15 : Trading volume : 4 lac Equity short term and 19 lac in Options.
Profit in equity short term : 4,500 and loss in options : 1,66,000 Total loss: 1,61,500

can I file itr 4s in my wife's case as 8% of total trading volume is below taxable income ?
Kindly advise early as I am very worried and not able to sleep peacefully.

1. If your income is below exempted limit, then the return is not required. Irrespective of the notice (statutory or non-statutory) received.

2. If you wish to file, regardless of the income (which is anyways an advisable step), then for FY 2013-14 you may file on or before 31 March 2016. For FY 2014-15, the return can be filed upto 31 March 2017.

3. For ITR4S, assuming the turnover mentioned by you has been correctly computed, it can be filed.

 

[gundiravi]

Thank you sir for your prompt reply. can u guide me in filling ITR 4 ?

 

[canikhil]

Thank you sir for your prompt reply. can u guide me in filling ITR 4 ?

tell me what guidance you need?

 

[gundiravi]

Dear sir

For the following data pl. advise which columns need to be filled in ITR-4.

1. PENSION : 1.47 LAC
2. TURNOVER IN SHORT TERM EQUITY : 28 LAC
3.TURNOVER IN INTRA DAY EQUITY : 4.5 LAC
4. TURNOVER IN OPTIONS : 7.2 LAC
5. LOSS IN SHORT TERM EQUITY : 28,000
6. PROFIT IN INTRA DAY EQUITY :4,800
7. LOSS IN OPTIONS : 11,000

Can I mention the total turnover rand total loss in one column each or should I mention them separately. kindly indicate the the column nos in ITR 4 for the above data.

Thanking you.

 

[canikhil]

Dear sir

For the following data pl. advise which columns need to be filled in ITR-4.

1. PENSION : 1.47 LAC
2. TURNOVER IN SHORT TERM EQUITY : 28 LAC
3.TURNOVER IN INTRA DAY EQUITY : 4.5 LAC
4. TURNOVER IN OPTIONS : 7.2 LAC
5. LOSS IN SHORT TERM EQUITY : 28,000
6. PROFIT IN INTRA DAY EQUITY :4,800
7. LOSS IN OPTIONS : 11,000

Can I mention the total turnover rand total loss in one column each or should I mention them separately. kindly indicate the the column nos in ITR 4 for the above data.

Thanking you.

ITR for is prepared in a very different manner and total turnover computed by formula suggested by ICAI has no role to play in this. I suggest you hire a local CA to fill the return for you.

 

[Win-Win]

Well the annual tax return season is just about to start and its the right time for you to evaluate whether you are supposed to anything more than just filing your tax returns.

This posts attempts to cover the issue of applicability of tax audit under various circumstances.

Till a few years ago, applicability of tax audit was a simple issue: If your turnover crosses a particular limit, you were required to get your accounts audited. However, since the introduction of refurbished Section 44AD, the applicability of audit has become a cumbersome issue.

So to make it easier for you all to know whether tax audit is applicable to you or not, I have shared below a few simple examples. (these examples have been shared at an earlier discussion in this forum too)

Case 1.

Turnover : Below Rs 1 cr
Gains/Loss from Business: 240000
Salary Income: No
any other income: Nil

Audit not required as condition of income exceeding maximum exemption limit not fulfilled

Case 2

Turnover: below Rs 1 cr
Gains: Rs 50000 (assumed)
Salary: Rs 250000

Audit required as condition of income exceeding maximum exemption limit and profit less than 8% fulfilled

Case 3

Turnover: Below Rs 1cr:
losses: 5 lakhs (assumed)
Interest Income: Rs 5 lakhs

Audit not required as losses will get set off against Interest income resulting in maximum income not exceeding maximum exempted limit.

In the above case, had the interest income exceeded Rs 7.5 lakhs, the audit would have become applicable.

Case 4

Turnover: Below Rs 1 cr

losses 5 lakhs (assumed)

Interest Income: Rs 2.5 lakhs,

Salary: Rs 3 lakhs

Audit required as only Rs 2.5 lakhs losses are set off against interest and remaining losses are to be carried forward (set off against salary not allowed). So income exceeds exempted limit.

Case 5

Turnover: Below Rs 1 cr

Speculative Losses: 2 lakhs

Interest Income : Rs 2.6 lakhs,

Salary: Ni

Audit required as speculative losses cannot be set off against interest income and both the conditions : income exceeding basic exemption limit and profit less than 8% are satisfied.

Case 6:

Turnover : Above Rs 1 cr. Don't bother. Audit is compulsory.

Kindly note that in the above examples it has been assumed there are no deductions available under section 80C, 80D etc.

Regards

Nikhil Kaushik

Will audit be required if salary is 4.5 lakhs, turnover in FNO (I am assuming this is profit/loss only and not the total value) is less than 1 Cr, losses 1.5 lakhs?