Hello Investor friends,
Hope you making money from the stock market. Great!
Do you know? Anyone who actively trading in the stock market has to file income tax returns mentioning details of Trading as a business activity income using the ITR-3 form.
You must be thinking what if there is a loss? Still, you have needed to file an Income Tax return using the ITR-3 Form.
Most small trader in ignorance get their return file basis Form 16 alone and later get Income Tax notice.
In My tax dost™, we frequently get such cases.
If you have filed Your Income Tax Return in this fashion or get filed from others, then be alert for notices.
Meaning of Filing ITR-3 Form
Even a small retail trader need to comply with all requirements of the business- Maintaining books of accounts; get books audited by Chartered Accountant as per requirement.
ITR-3 Form is a very long form in comparison with ITR -1 & 4.
Very difficult to fill by a normal person having less information about the tax laws of India.
How to calculate Turnover in Trading & Audit?
For this, we need to look for ICAI (The Institute of Chartered Accountant of India) guidelines.
Which say, turnover means sell value of equity delivery trades and the absolute sum of Profit and loss for all the types of Trades done.
You can foresee if we adopt this method, turnover will shoot up quite fast for anyone who is actively trading in stock markets.
Currently, the audit requirement is mandatory when turnover is over 5Cr (Rs 10cr in Budget 2021, for the period 1st April 21 to 31st March 2022).
Even if turnover is less than that, Trader income will be calculated 6% of Turnover, minimum otherwise, Get Tax Audit from a Chartered Accountant.
Maintaining books of accounts and look for a Chartered Accountant is tiring work in itself.
Hope you feeling the same.
Here Team MyTaxDost can help you and you can focus on Trading without any tension on the tax front.