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

[canikhil]

little confussion here...is it total income here 520000 ...so it cannot adjust losses of trading with it...so its above 2.5 lak limit...here turnover means of trading ?from trading he hav loss of 10 lac ...so he no have profit from turnover if adjusted with 520000 then he still have 480000 loss ...so here you mean less than 6% of turnover mean this 480000 loss?so if its more than 6lac loss then no need audit?

See, here his income is Rs 500000/- as interest income will get adjusted against the trading losses. Since salary cannot be adjusted, you satisfy both the conditions : income above exempted limit and profit below 6%. Hence the audit becomes applicable.

Now assume there is no salary income, in that case, as long as the turnover is below Rs 2 cr, audit should not apply.

 

[VJAY]

See, here his income is Rs 500000/- as interest income will get adjusted against the trading losses. Since salary cannot be adjusted, you satisfy both the conditions : income above exempted limit and profit below 6%. Hence the audit becomes applicable.

Now assume there is no salary income, in that case, as long as the turnover is below Rs 2 cr, audit should not apply.

Thanks nikhil....now its cleared

 

[john302928]

depends on whether he has salary income or not because you cannot adjust losses against salary income. so assume that you have Rs. 1 Cr as turnover, loss of Rs 10 lakhs, interest income of Rs 20000 and salary of Rs 500000/- Now in this case as per 44AD, audit is applicable as your income after adjusting losses, will still be above Rs 2.5 lakhs and your profit is less than 6% of the turnover.

1.What is the non audit case to carryforward the losses from trading?
2.Does bank FD deposit and withdrawal income from house property to be included in the turnover calculation? or only trading turnover is called turnover if we dont have any other business activities.

 

[canikhil]

1.What is the non audit case to carryforward the losses from trading?
2.Does bank FD deposit and withdrawal income from house property to be included in the turnover calculation? or only trading turnover is called turnover if we dont have any other business activities.

cases where conditions for audit under 44AD are not achieved.

Incomes covered under other heads of income are not included in the turnover.

 

[john302928]

cases where conditions for audit under 44AD are not achieved.

Incomes covered under other heads of income are not included in the turnover.

please enlighten 44AD in layman terms. It would be of great help to every one.Thanks

 

[canikhil]

please enlighten 44AD in layman terms. It would be of great help to every one.Thanks

I think there are other posts that I have written on this. In case you have a specific query. Please do raise.

 

[john302928]

I think there are other posts that I have written on this. In case you have a specific query. Please do raise.

Say we have turnover less than 2cr and only loss of 6lk which is less than 6% of the turnover and FD interest of 50k and income from house property is 80K, and want to carry forward the losses to further years. can we do it without doing audit or audit is mandatory? Somewhere I read that after having less than 2cr and loss we have to check our total income whether it is above min tax slab or or not. if it is above tax slab then we have to do audit else audit is not necessary and we can carry forward the losses to 8 years without auditing. in this case loss 6lk and FD interest K and rent income 80k so that total income is -6l+50k+80k=-4,70,000 which is less than minimum tax slab ie 2.5l so in this case do we need to do audit? is there any rule like that or not? Some say there is no rule like this but in zerodha or somewhere i read this.
But I could not find any clear information about this no audit case but still carry forwarding losses by ourselves. Please help me understand in this case. There would be lot of people who are struggling to find answer for this case. Thanks in advance

 

[john302928]

One more small doubt, Fo

Say we have turnover less than 2cr and only loss of 6lk which is less than 6% of the turnover and FD interest of 50k and income from house property is 80K, and want to carry forward the losses to further years. can we do it without doing audit or audit is mandatory? Somewhere I read that after having less than 2cr and loss we have to check our total income whether it is above min tax slab or or not. if it is above tax slab then we have to do audit else audit is not necessary and we can carry forward the losses to 8 years without auditing. in this case loss 6lk and FD interest K and rent income 80k so that total income is -6l+50k+80k=-4,70,000 which is less than minimum tax slab ie 2.5l so in this case do we need to do audit? is there any rule like that or not? Some say there is no rule like this but in zerodha or somewhere i read this.
But I could not find any clear information about this no audit case but still carry forwarding losses by ourselves. Please help me understand in this case. There would be lot of people who are struggling to find answer for this case. Thanks in advance

Query 2:
One more small doubt, with the above case of turnover,income and losses what if I dont want to carry forward the losses. do i need to show 6% of tunover as income and add with rest of the incomes and pay according to my tax slab? or No need to show 6% of turnover as income and no need to pay any taxes since in this case loss 6lk and FD interest K and rent income 80k so that total income is -6l+50k+80k=-4,70,000 which is less than minimum tax slab ie 2.5l
Please help

 

[kcsusha]

What is the meaning of Turnover-is it total sales and purchases of Equities, Options, Futures,commodities etc?

 

[IKAR]

What is the meaning of Turnover-is it total sales and purchases of Equities, Options, Futures,commodities etc?

For equities it is gross receipts that is total sales (pls confirm from others).

For FNO it is like this

Total of Absolute value of profits AND losses for all trades. Each trade can have a P or L. You have to add each trade's absolute value of P and L. Many places call this favouable (P) and unfavourable (L). P is always positive, so absolute value does not matter. Absolute value of Loss will also become positive. If you make 200 gain in one trade and -300 (loss) in another the total turnover is 200 PLUS 300 = 500 because Abs(-300) = 300

For options trading along with this you have to add the sell value of options. If your second trade of loss of Rs.300 mentioned above happens by buying one option lot for 2400 and then selling it for 2100 then your turnover will be

Absolute of gain or loss, here Abs(-300) = 300
Sell value of options = 2100
Total turnover = 2100 + 300 = 2400

I am not a CA, I have got help from here, so trying to help in whatever way I can, so please verify if in doubt