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

[canikhil]

In such cases they will even ask for a contract notes which is almost 240-250 pages long ??

I think the only solution is-
1)try to earn a good amount from trading
2)get a/c audited with a good CA so that even if something goes wrong CA will appear b4 the IT dept.

The main problem with most us is that,we are small traders and many of us are either making 2-3 lakhs or loosing 2-3 lakhs every year.
Else,getting a/c audited isnt a big deal.

ty

1. They wont ask for 100% contract notes. A sample may be asked for.

2. Generally the PDF version of contract list should suffice.

 

[Smart_trade]

not taken care yet my friend.
If you are facing any low IQ or corrupt IT officer,they will harass you anyway

ITO is not God Almighty and he cannot decide your fate if you are an honest taxpayer.Even if ITO does wrong assessment, one can go into appeal to higher officers and there are many cases when decision of ITO is reversed by Income Tax Appellate Tribunal.It involves bit of work that is all.Firstly above ITO one can appeal to IT Commissioner and then to IAT...so don't worry unnecessarily.

Smart_trade

 

[Bhairava]

Sir,say my turnover is 2 crores 82 lakhs 65 thousand and 75 paisa.And I'm doing audit based on this figure provided by Zerodha and paying a tax on the profit which is say 9 lakhs.
now,what if Income tax dept saying that the turnover is 3.87 crores like something? is it possible??
may be IT dept seeing a different turnover in their database based on my PAN card and I'm mentioning a different turnover.But I'm doing audit.

ty

Nikhil Sir and ST Sir,
I have a query based on above users query-Why so much suffering after audit?
When someone is paying a tax on that 9lakhs amount honestly and doing audit,what difference does it make if the turnover is 2.87Crs or 3.87Cr?
Tax is based on Net profit only which is 9lakhs here.

 

[Smart_trade]

Nikhil Sir and ST Sir,
I have a query based on above users query-Why so much suffering after audit?
When someone is paying a tax on that 9lakhs amount honestly and doing audit,what difference does it make if the turnover is 2.87Crs or 3.87Cr?
Tax is based on Net profit only which is 9lakhs here.

Audit is for ensuring that the profit is calculated correctly.

Smart_trade

 

[canikhil]

Audit is for ensuring that the profit is calculated correctly.

Smart_trade

You are talking about "ends are more important than means"

but even "means matter"

How will an Income-tax officer know without inquiry and verification, whether the profit/loss is correct if the turnover data varies? Therefore I said you need to demonstrate that all the trades have been covered.

 

[natjay]

Can anyone confirm if these turnover and auditing rules apply to commodities as well?

I just started trading in MCX commodities (I don't trade in any other segment or exchange). I have a freelance business income of 6 lakhs which includes interest income from FDs on which TDS is deducted by the bank. I file all my returns using form ITR-4.

Since my non-trading income is already taxable, am I correct in thinking that I have to get my trading account audited irrespective of turnover?

Thanks in advance for your advice.

 

[Bhairava]

Audit is for ensuring that the profit is calculated correctly.

Smart_trade

You are talking about "ends are more important than means"

but even "means matter"

How will an Income-tax officer know without inquiry and verification, whether the profit/loss is correct if the turnover data varies? Therefore I said you need to demonstrate that all the trades have been covered.

P&L report tells everything.
Opening Balance is 10lakhs and closing balance is 19lakhs.That means the trader has made 9lakhs profit,right?
After some deduction we are paying tax on the remaining amount.
But how the audit is going to match the turnover difference with IT dept?
Even CA's dunno how much turnover has been reflected under my PAN Card databse?So turnover difference will be there.
I think this is very contradictory.

 

[niftygupshup]

Can anyone confirm if these turnover and auditing rules apply to commodities as well?

I just started trading in MCX commodities (I don't trade in any other segment or exchange). I have a freelance business income of 6 lakhs which includes interest income from FDs on which TDS is deducted by the bank. I file all my returns using form ITR-4.

Since my non-trading income is already taxable, am I correct in thinking that I have to get my trading account audited irrespective of turnover?

Thanks in advance for your advice.

No, audit not necessary
Unless, your gross TO is over 2 crores (applicable from current FY, previously it was 1 crore), irrespective of profit percentage
or
your TO less than 2 crores and profit less than 8%

But, it will good to go with audit, if you are ready to bear with audit expanses.

 

[canikhil]

Can anyone confirm if these turnover and auditing rules apply to commodities as well?

I just started trading in MCX commodities (I don't trade in any other segment or exchange). I have a freelance business income of 6 lakhs which includes interest income from FDs on which TDS is deducted by the bank. I file all my returns using form ITR-4.

Since my non-trading income is already taxable, am I correct in thinking that I have to get my trading account audited irrespective of turnover?

Thanks in advance for your advice.

Audit will depend on the turnover and the net income after adjusting current losses against other incomes of the current year. So don't presume that audit is applicable.

 

[canikhil]

P&L report tells everything.
Opening Balance is 10lakhs and closing balance is 19lakhs.That means the trader has made 9lakhs profit,right?
After some deduction we are paying tax on the remaining amount.
But how the audit is going to match the turnover difference with IT dept?
Even CA's dunno how much turnover has been reflected under my PAN Card databse?So turnover difference will be there.
I think this is very contradictory.

Where did I say that the audit will reconcile the broker's data with Income-tax data!

All I said was that the ITO will have to verify the data to ensure that all the transactions have been covered in the books of accounts!

Income-tax is not all about the "net profit." Maintenance of books also include proper reflection of each transaction recorded as per the standard accounting methods.