Understanding of Turnover & Tax Audit for Market Traders

• December 6, 2020
• CA Chandan Agarwal's Office

EASY UNDERSTANDING OF TURNOVER & TAX AUDIT FOR TRADERS

1. When Tax Audit is Required?

Answer: Threshold Limit 5 Crores: If a person’s Gross receipt and payment in cash does not exceed 5% of total receipts and total payment then the limit of turnover for mandatory tax audit is Rs. 5 Crores.

Section 44 AD : If the turnover is less than Rs 2 crore, and if the Profit is less than 6% and the total income exceeds the original exemption ( ultimately when a person’s taxable income other than the loss from trading is more than the taxation slab this section applies).

Note 1 : If the turnover is less than Rs 5 crore, you are not required, but your total income is within the taxable limit of 2.5 Lakhs.

Note 2 : The limit of Rs. 5 crores is applicable from the financial year i.e. 2019-2020. This is the case with digital transactions, and stock market trading is 100% digital.

Read more on: https://taxguru.in/income-tax/understanding-turnover-tax-audit-market-traders.html