Search Results For: Audit of accounts – Business – Profession - Limit of F & O transactions for tax audit

QUERY: A is having salary of about Rs. 30 lakhs. He has also done F & O transactions in shares. As per guidance note on tax audit of ICAI total of favourable and unfavourable differences shall be taken as turnover in F & O transaction. For A.Y. 2013-14 favourable difference is 80 lakhs and unfavourable difference is 10 lakhs, hence, A has paid income tax on Rs. 70 lakhs. Whether A is required to maintain books of account and get tax audit or can A claim that he does not maintain books of account, and offer business income @ 8% of Rs. 70 lakhs as per section 44AD?
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The Guidance Note on Tax Audit under section 44AB of the Income-tax Act, 1961 states that in case of Derivatives, Futurer and options the difference between total favourable and unfavorable is to be considered as turnover for the purpose of deciding the limit under section 44AB of the Act.