TAX AUDIT, Income Tax

[malhar shenoy]

Is Tax Audit compulsory for person Trading in Shares ?

Shares are bought by  Demat & sold within a week time, So itension  to  hold the assets as investment cannot be established .Whether the same can be treated as Capital Gain ? If yes let me know the supporting case law , also  please  critically analyse the circular issued by CBDT.

As per my view it is Business Income ,  what would be the Turnover for the same , as considering the Share Price as Turnover it will definately be more than Rs 60 Lakhs. Or as per section 44 AD , it will not have a profit more than 8% of the total turnover.

So cost of compliance for Tax Audit  would be more than the Earnings made on the Share Trading.

Please consider any other aspects relating to this issue & reply.

Posts / Replies

[GOPALJI AGRAWAL]

Yes, the transactions would be considered in the business nature. For the purpose turnover calculation, you may refer guidance note on tax audit issued by ICAI.