Tax Audit in case of F&O Trader

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  1. amit2332

    amit2332 New Member

    I need an advice. I trade in FNO and also have salary income.
    Do I need to get my accounts audited in case of FNO transactions - if my net profit/loss is less than 1 crore, but the gross buy/sell figure is greater than 1 crore ?

    I have not been getting audited all these years. Information on any web does not cover this detail.
    Kindly advise.

    Amit Kumar
  2. rudrabose

    rudrabose Active Member

    You would only be required to get your tax audit done under Section 44AB if the sum of profit and loss is more than 1 Crore. If trade value is not to be considered in this case.

    Let me explain this with the help of an example:-

    1. Profit : 70 Lakhs
    2. Loss: 40 Lakhs

    As the total of Profit + Loss is more than 1 Crore, Audit under Section 44AB is required to be done.

    However, in case the profit was 70 Lakhs and Loss was 20 Lakhs - the total would be less than 1 crore and therefore audit wont be required to be done.

    I hope the above example clarifies on How Turnover is calculated for the purpose of F&O Transactions for the purpose of conducting Audit under Section 44AB
  3. amit2332

    amit2332 New Member

    Thanks a lot Rudrabose for your quick reply.

    I have about 2 lac of losses, so I believe, I do not need to get it audited.
    I am also fine to not show this loss at all, if it is legal. And just go ahead and file ITR-2. Can I file ITR-2 now, or file ITR-4 itself without showing and FNO ?

    I have claimed loss in my last year's claim and got it audited. CanI still set off future profits against that loss if I do not get accounts audited this year ?

  4. rudrabose

    rudrabose Active Member

    You can set off the previous year loss against future year profits even if you dont get the accounts audited.
    amit2332 likes this.
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