Income tax filing season…. And every second return is having share trading F&O trading transactions. Thanks to AIS through which people are accepting “yes they did trading….”
Department is changing rules, information disclosing requirements, processing patterns etc. It’s time to disclose all Income/gains and losses in your ITR. Select the correct ITR and disclose correct information to avoid future litigation.
No, no.. I am not distracted from the topic…
Few days are left for the filing of Income tax return due date for non-audit assessees. And getting lots of questions from people regarding F&O trading loss.
This article put some light on the same … and your queries get resolved….
As I discussed in the article Future & Options (F&O) Accounting, Audit and Taxation that Future and option trading income is Business income. So if a salaried person is doing F&O trading, he is doing business.
I am answering here some questions which are frequently asked..
Q. What are the cases where tax audit is required.??
Ans. Following are the cases when audit is required of under income tax act:-
When the threshold limit of Section 44AB(a) is crossed.
If Assessee opted for 44AD and wanted to declare a loss.
If the assessee is opting out from 44AD .
Other considerable factors.
If the assessee is falling in any of these cases then the tax audit is required.
Q. Is it possible to carry forward losses without audit.?”
My answer is yes. It is possible to carry forward the losses without audit. But not in all cases. It will depend case to case.
Q. Do I need to maintain books of accounts?
Yes, if your turnover or receipts cross the threshold limit mentioned under section 44AA(2) of the income tax act.
If a person opted for 44AD and comply with all conditions then he is not required to maintain books of accounts.
Q. Can I ignore the losses from F&O trading?
No, You should not ignore the losses from F&O trading. You should carry forward such losses for succeeding years. Disclosure of losses can save you from future litigations with IT departments.
Hope I resolved all your questions. I will elaborate more on this in my next article.
You can put your queries in the query box. I will try to resolve it.
Thank you for reading!
Disclaimer: This article is solely for educational purposes and cannot be construed as legal and professional opinion. It is based on the interpretation of the author and is not binding on any tax authority. Author is not responsible for any loss occurring to any person acting or refraining from acting as a result of any material in this article. You can reach author at caharshalisalvi@gmail.com