Tax Audit Report – Form 3CA, 3CB, 3CD

What is a Tax Audit Report?

As per the Income Tax Act, Tax Audit as per Sec 44AB of the Income Tax Act is applicable to a business or profession in certain specified situations. Tax Audit Report is the report prepared by a Chartered Accountant in practice after auditing the books of accounts of a business. Under Tax Audit, the CA ensures whether the books of accounts are correctly prepared and the taxable income is accurately calculated as per the provisions of the Income Tax Act.

Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
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Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
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In the case of an assessee to whom Tax Audit as per Section 44AB of the Income Tax Act is applicable, here are the next steps:

  • Appoint a Chartered Accountant in practice to audit the books of accounts
  • Chartered Accountant files Audit Report in Form 3CB-3CD or Form 3CA-3CD
  • Taxpayer files Income Tax Return in Form ITR 3

Tax Audit Report – Form 3CA, 3CB, 3CD, 3CE

The format of the Audit Report is specified by the Income Tax Department with specified particulars. Form 3CA and 3CB is the statement with auditors’ information while form 3CD is the statement with details of the tax audit.

Form Name Description
Form 3CA-3CD Tax Audit Report in the case of a taxpayer having business or profession income who is mandatorily required to get accounts audited under any other Act (other than Income Tax Act)
Form 3CB-3CD Tax Audit Report in the case of a taxpayer having business or profession income who is not required to get accounts audited under any other Act (other than Income Tax Act)
Form 3CE A Tax Audit Report in the case of a taxpayer who is a Non-Resident or Foreign Company receiving a royalty or fee for technical services

Method to Upload and File Tax Audit Report

Up to FY 19-20

  • Taxpayer adds CA from their Income Tax Account
  • CA uploads P&L, Balance Sheet & Tax Audit Report from their income tax account
  • Taxpayer approves Tax Audit Report
  • Taxpayer files ITR using DSC

FY 20-21 Onwards

  • Taxpayer adds CA from their Income Tax Account
  • Taxpayer uploads P&L and Balance Sheet from their income tax account
  • CA approves P&L and Balance Sheet
  • CA files Tax Audit Report
  • Taxpayer approves Tax Audit Report
  • Taxpayer files ITR using DSC

Due Date to Upload Tax Audit Report

ITR for Proprietors with Business Income
CA Assisted Income Tax Return filing for Individuals & HUFs with business income from Proprietary Firm.
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ITR for Proprietors with Business Income
CA Assisted Income Tax Return filing for Individuals & HUFs with business income from Proprietary Firm.
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Guidance Note on Tax Audit

The Tax Audit Report has 2 parts – Form 3CA/3CB and Form 3CD. While Form 3CA/3CB is the statement with details of auditor, Form 3CD is the Statement with particulars required to be reported as per Sec 44AB of the Income Tax Act.

Form 3CA

Clause Information
Point no.1 Name, Address & PAN of taxpayer
Name of Auditor
Law under which accounts are audited
Date of Audit Report
Period of P&L Account
Date of the Balance Sheet
Point no.2 A declaration that the Audit Report Form 3CD is attached
Point no.3 Audit Observations or Qualifications as per Form 3CD
Point no.4

Name, Address, Membership Number of Auditor
Place & Date of Sign
Stamp & Seal of Auditor

Form 3CB

Clause Information
Point no.1 Date of Balance Sheet and P&L Statement
Name, Address, and PAN of Taxpayer
Point no.2 Address where books of accounts are kept
Address of branches (if books of accounts are kept at branches)
Point no.3 Observations, Comments, Discrepancies, and Inconsistencies reported by the auditor
Declaration by the auditor of:
* Obtaining all information required for audit
* Confirming that the business has maintained proper books of accounts
* Reporting that Balance Sheet and P&L Account reflects a true and fair view of the business
Point no.4 Declaration of attaching Form 3CD along with the Audit Report Form 3CB
Point no.5 Details of the Auditor – Name, Address, Membership Number, Firm Registration Number, Date, and Place

Form 3CD

It is a detailed statement with 44 different clauses filed by the auditor reporting information related to the business and its transactions for the relevant financial year. The IT Department has prescribed Form 3CD format and utility that a CA can use for filing the audit report.

Form 3CE

Clause Information
Point no.1 Name, Address & PAN of Non-Resident
Financial Year
Point no.2 Declaration of obtaining all information and explanations for audit
Point no.3 Certification on Permanent Establishment or Fixed Place of a profession in India
Point no.4 Declaration of income from royalty or fees for technical services under Section 44DA
Point no.5 Signature and Name of Auditor with stamp and seal

In addition to Form 3CE, details of income from royalty or fees for technical services should be mentioned in an Annexure.

Penalty for not filing Form 3CD

An assessee who is liable to get books of accounts audited as per Section 44AB fails to do so, the Assessing Officer i.e. A.O. may impose a penalty under Section 271B. The penalty shall be lower of the following:

  • 0.5% of Total Sales / Turnover of business or 0.5% of Gross Receipts of profession
  • INR 1,50,000

However, if the assessee can prove a reasonable cause for failure to get a tax audit done, the A.O. may not impose the penalty.

FAQs

If a taxpayer is required to do an audit under any other law, is it mandatory to do Tax Audit as per Income Tax?

Taxpayers like Company or Cooperative Society are required to do audits under their respective laws. The audit conducted under any other law may not provide a confirmation that the requirements of the Income Tax Act have been complied with. In such cases, if Tax Audit as per Section 44AB is mandatory, the audit report should be filed by the Chartered Accountant in prescribed form i.e. Form 3CA-3CD.

Is it possible to revise Tax Audit Report?

Yes. Tax Audit Report already filed can be revised. However, a valid reason for revising the audit report must be specified by the auditor. It must have a reference to the old Audit Report and must be signed in the current date. Generally, an audit report can be revised due to the following reasons:
1. Revision of accounts of the taxpayer
2. Change of law with a retrospective amendment
3. Change in the interpretation of provisions, CBDT circular, CBDT judgment, etc
4. Technical change in system or software

Tax Audit under Section 44AB of Income Tax Act

Tax Audit under Section 44AB of the Income Tax Act is the examination and review of the books of accounts of a taxpayer having income from business or profession. The taxpayer should appoint a practicing CA i.e. Chartered Accountant to audit the books of accounts. The tax auditor would ensure that books of accounts have been maintained correctly, report observations, and required information in the tax audit report. The applicability of tax audit depends upon the turnover/sales/gross receipts of the business or profession.

Tax audit limit has been increased from INR 5 Cr to 10 Cr for taxpayers who carry out 95% of their transactions in the digital mode as announced in the budget 2021 by the FM. This limit was initially increased from INR 1 Cr to INR 5 Cr in Budget 2020

Tax Audit under Section 44AB for Business

Turnover / Sales up to INR 1 Cr

  • If the taxpayer has incurred loss or the profit is less than 6% or 8% of Turnover / Sales, , total income exceeds the basic exemption limit and taxpayer has opted out of presumptive taxation scheme in any of the previous 5 years, Tax Audit as per Sec 44AB(e) is applicable. The taxpayer should file ITR 3.
  • If the taxpayer has a profit of more than or equal to 6% or 8% of Turnover / Sales, Audit is not applicable.
    • However, if the taxpayer has opted for the Presumptive Taxation Scheme under Section 44AD, they need to file ITR 4.
    • And, if the taxpayer has not opted for the Presumptive Taxation Scheme under Sec 44AD. The taxpayer should still file ITR 3.

Turnover / Sales more than INR 1 Cr and up to INR 2 Cr

  • If the taxpayer has incurred a loss or the profit is less than 6% or 8% of Turnover / Sales, Audit as per Sec 44AB(a) is applicable. The taxpayer should file ITR 3
  • If the taxpayer has a profit of more than or equal to 6% or 8% of Turnover / Sales and has not opted for Presumptive Taxation Scheme under Sec 44AD, Audit is applicable as per Sec 44AB(a). The taxpayer should file ITR 3
  • If the taxpayer has a profit of more than or equal to 6% or 8% of Turnover / Sales and has opted for the Presumptive Taxation Scheme under Sec 44AD, Audit is not applicable. The taxpayer should file ITR 4
  • If the taxpayer has a profit of more than or equal to 6% or 8% of Turnover / Sales and has not opted for the presumptive taxation scheme, then they must file the tax audit report

Turnover / Sales more than INR 2 Cr

  • Tax Audit under Sec 44AB(a) is applicable irrespective of the profit or loss. The taxpayer should file ITR 3

Note: The prescribed rate is 8% for non-digital transactions and 6% for digital transactions

Tax Audit limit change FY 2020-21 onwards

The limit for turnover under Section 44AB is INR 1 Cr. Under budget 2021, the turnover limit under Sec 44AB has been increased from INR 5 Cr to 10 Cr if the following conditions are satisfied:

  1. Cash Payments do not exceed 5% of the Total Payments in the financial year AND
  2. Cash Receipts do not exceed 5% of the Total Receipts in the financial year

Note: For the taxpayers who do not satisfy the above conditions, the limit under Sec 44AB of INR 1 Cr remains unchanged

Tax Audit limit change FY 2019-20 onwards

The limit for turnover under Section 44AB is INR 1 Cr. Under Budget 2020, the turnover limit under Sec 44AB has been increased from INR 1 Cr to 5 Cr if the following conditions are satisfied:

  1. Cash Payments do not exceed 5% of the Total Payments in the financial year AND
  2. Cash Receipts do not exceed 5% of the Total Receipts in the financial year

Note: For the taxpayers who do not satisfy the above conditions, the limit under Sec 44AB of INR 1 Cr remains unchanged.

Tax Audit u/s 44AB for Profession

Turnover / Sales up to INR 50 lacs

  • If the taxpayer has incurred loss or the profit is less than 50% of Gross Receipts, and the Total Income is more than Basic Exemption Limit, Tax Audit as per Sec 44AB(d) is applicable. The taxpayer should file ITR-3
  • If the taxpayer has a profit of more than or equal to 50% of Gross Receipts and has not opted for the Presumptive Taxation Scheme under Sec 44ADA, Tax Audit is applicable as per Sec 44AB(d). The taxpayer should file ITR 3
  • If the taxpayer has a profit of more than or equal to 50% of Gross Receipts and has opted for the Presumptive Taxation Scheme under Sec 44ADA, Tax Audit is not applicable. The taxpayer should file ITR-4

Turnover / Sales more than INR 50 lacs

  • Tax Audit under Sec 44AB(b) is applicable irrespective of the profit or loss. The taxpayer should file ITR 3

Tax Audit under Section 44AB(c) of Income Tax Act

If a business eligible for Presumptive Taxation under Sec 44AE, 44BB, or 44BBB but reports profits or gains lower than the prescribed rate under the relevant section, they are liable to Tax Audit under Section 44AB(c).

Tax Audit of Trading Income

Stock Traders trade in shares, securities, commodities, and currency through online trading platforms. Income from trading in Equity Intraday, Equity F&O, Commodity Trading, and Currency Trading is considered as a Business Income. Thus, it is important to determine if the Tax Audit as per the provisions of the Income Tax Act is applicable to Trading Income.

Under budget 2021, the limit for turnover as per Section 44AB is increased from INR 5 Cr to INR 10 Cr if at least 95% of the total payments and at least 95% of the total receipts are digital in nature.

In the case of Traders, the limit for Tax Audit applicability u/s 44AB would be INR 10 Cr since all transactions are digital. For the taxpayers who do not satisfy the above conditions, the limit under Sec 44AB of INR 1 Cr remains unchanged.

Let us understand the conditions for Tax Audit in the case of Stock Traders who have all their trading transactions online. The presumptive rate is 6% since the transactions are digital. The increased limit of INR 10 Cr is applicable FY 2020-21 onwards. If the tax audit is applicable the trader should appoint a CA to prepare and file a tax audit report.

In the case of Income Tax on Trading, since all these trading transactions are digital, the prescribed rate under Sec 44AD would be 6% instead of 8% in normal cases.

Tax Audit of Trading Income – AY 2021-22 Onwards

Trading Turnover up to INR 2 Cr

  • Tax Audit as per Sec 44AB(e) is applicable if there is loss or profit is less than 6% of Trading Turnover, total income exceeds the basic exemption limit and taxpayer has opted out of presumptive taxation scheme in any of the previous 5 years.
  • Tax Audit is not applicable if the profit is more than or equal to 6% of Trading Turnover.

Trading Turnover more than INR 2 Cr and up to INR 10 Cr

  • Tax Audit is not applicable irrespective of profit or loss.
  • Under Budget 2021, the turnover limit under Sec 44AB has been increased from INR 5 Cr to INR 10 Cr. However, the turnover limit under Sec 44AD has not been changed. When the Trading Turnover is between INR 2 Cr and INR 10 Cr, neither Sec 44AB is applicable nor Sec 44AD. Thus, Tax Audit is not applicable irrespective of profit or loss. The Income Tax Department is expected to make an amendment to the turnover limit of Sec 44AD to resolve this loophole.

Trading Turnover more than INR 10 Cr

  • Tax Audit under Sec 44AB(a) is applicable irrespective of the profit or loss.

Tax Audit of Trading Income – Upto AY 2019-20

Trading Turnover up to INR 1 Cr

  • Tax Audit as per Sec 44AB(e) is applicable if there is loss or profit is less than 6% of Trading Turnover, total income exceeds the basic exemption limit and taxpayer has opted out of presumptive taxation scheme in any of the previous 5 years.
  • Tax Audit is not applicable if the profit is more than or equal to 6% of Trading Turnover.

Trading Turnover more than INR 1 Cr and up to INR 2 Cr

  • Tax Audit as per Sec 44AB(a) is applicable if:
    • There is a loss or profit is less than 6% of Trading Turnover.
    • The profit is more than or equal to 6% of Trading Turnover and the taxpayer has not opted for the Presumptive Taxation Scheme under Sec 44AD.
  • Tax Audit is not applicable if the profit is more than or equal to 6% of Trading Turnover and the taxpayer has opted for the Presumptive Taxation Scheme under Sec 44AD.

Trading Turnover more than INR 2 Cr

  • Tax Audit under Sec 44AB(a) is applicable irrespective of the profit or loss.

FAQs

If a business is liable to get accounts audited under any other law, is Tax Audit under Income Tax Act also required?

Assessee such as Company is liable to Statutory Audit under Companies Act 2013. As per Section 44AB, if an assessee is required to get audit under any other law, he/she need not get the accounts audited again to comply with Section 44AB. In such a case, the assessee should submit the report as per audit under the other law and also a Tax Audit Report (Form 3CB-3CD) by a Chartered Accountant as prescribed by Section 44AB.

What is the Due Date for Tax Audit as per Section 44AB?

Assessee liable to tax audit as per section 44AB of the Income Tax Act should get the books of accounts audited on or before 30th September of the next financial year. In case of the applicability of tax audit for AY 2019-20, the due date to file the audit report was 30th September 2019.

AY 2020-21 onwards, the due date to file the Tax Audit Report has been amended to 31st October of the next financial year. The assessee should appoint a practicing CA. Once the CA electronically files the tax audit report, the assessee must approve the tax audit report from the account on incometaxindiaefiling.gov.in.

What is the penalty if I do not get books of accounts audited as per Section 44AB?

If the assessee does not get accounts audited as per requirements of Section 44AB, the Assessing Officer may impose a penalty under Section 271B. The penalty is lower of the following:
(a) 0.5% of Sales / Turnover / Gross Receipts OR
(b) INR 1,50,000
However, if the assessee can provide a valid justification and prove a reasonable cause for not getting a tax audit, the Assessing Officer may not impose any penalty.

Is the Tax Audit limit of INR 5 Cr increased for MSME only?

After the Budget 2020 speech, there was confusion regarding the tax audit limit. Whether the limit of INR 5 Cr was increased for MSME only?
No. The limit of INR 5 Cr is not restricted to MSME only. As per the Finance Bill, the increased limit in Sec 44AB is applicable to any person who earns Business Income.

I have a loss from Intraday / F&O Trading. Is Tax Audit applicable?

Tax Audit applicability as per Income Tax Act is:

1. If the Trading Turnover in a financial year is up to INR 2 Crore and net profit is less than 6% of the trading turnover
2. If the Trading Turnover exceeds INR 2 Crore irrespective of profit or loss
The limit of turnover to determine tax audit has been increased to INR 5 Cr under Budget 2020. The new limit is applicable to AY 2020-21. Therefore in the case of loss from Intraday Trading, Tax Audit is applicable.

How do I calculate Trading Turnover for Intraday Trading and F&O Trading?

Trading Turnover should be calculated to determine the Tax Audit applicability as per the Income Tax Act. Absolute Turnover is the sum of the absolute value of profit and loss of each trade during the financial year.
1. Trading Turnover for Intraday Trading = Absolute Turnover
2. Trading Turnover for F&O Trading
Futures = Absolute Turnover
Options = Absolute Turnover + Premium on Sale of Options

How to File ITR for Sharekhan?

A Sharekhan Trader has to file ITR based on the income they have from trading in equity, mutual funds, or derivatives. Sharekhan provides a Tax P&L Report to all its traders aggregating the trading transactions done during the financial year. Using the Tax P&L Report, the trader can determine which ITR Form to file and also determine the applicability of the Tax Audit. If you are a Sharekhan Trader and looking to file your ITR (Income Tax Return), you can also refer to the detailed process below.

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Tax P&L Statement of Sharekhan Explained

Therefore, as you can see from your image, your statement provided by the portal is not a consolidated one. Therefore, you have to download the statements for the different segments separately. Given below is the break down of the tabs mentioned from the above statement:

  • Holding Period – It is the return on an asset or portfolio over the whole period during which it was held. It is one of the simplest and most important measures of investment performance
  • Realized Gain/Loss – It refers to profit or loss on a completed trade
  • Short Term Transaction -It refers to those trading strategies in stock market or futures market in which the time duration between entry and exit is within a range of few days to few weeks
  • Long Term Transactions – Transactions involving capital assets you held more than 1 year are generally long-term
  • Speculation Transaction – It means a transaction in which a contract for the purchase or sales of any commodity including stocks and shares is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips

Which ITR Form is Applicable to Sharekhan?

To file an ITR is an annual process for Sharekhan traders. Based on the income situation, the taxpayer needs to file the prescribed ITR Form. The taxpayer should report incomes, calculate and pay taxes, claim TDS Credits and request refund for the overpayment of taxes while filing their ITR. The income tax department has also notified ITR Forms based on different income situations. To know which ITR Form is applicable to you, you can use the below calculator. 

Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
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Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore

Taxpayers having income from trading need to file ITR-2 or ITR-3 based on the nature of income from trading. In the case of Capital Gains Income, file ITR-2 and in case of Business Income, file ITR-3.

Due Date of Filing ITR for Sharekhan

Income Tax Return(ITR) filing is done after the completion of a financial year. Due dates for ITR filing are as per section 139 of the income tax act. Therefore, due dates for different category of taxpayers are as follows:

Category

Due Date

Individuals to whom audit is not applicable

31st July of the Assessment Year

Companies

30th September of the Assessment Year

Individuals to whom audit is applicable

30th September of the Assessment Year

Individuals/ HUF who are partners in a firm and firm’s accounts are subject to audit

30th September of the Assessment Year

To add, the above due dates can be extended by the IT Department via order.

Tax Audit Applicability for Sharekhan

Stock Traders trade in shares, securities, commodities and currency through online trading platforms. Additionally, income from trading in Equity Intraday, Equity F&O, Commodity Trading, and Currency Trading is considered as a Business Income. Thus, it is important to determine the applicability of Tax Audit as per the provisions of Income Tax Act.

Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore
Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore

The limit for turnover under Sec 44AB is Rs. 1 Cr. Under Budget 2020, the turnover limit under Sec 44AB has been increased from Rs. 1 Cr to Rs. 5 Cr if the following conditions are satisfied:

  1. Cash Payments do not exceed 5% of the Total Payments in the financial year
    AND
  2. Cash Receipts do not exceed 5% of the Total Receipts in the financial year

Calculation of Trading Turnover for Sharkehan

Any person having income from trading in shares and securities should report it as income from business and profession. To determine the applicability of Tax Audit as per the Income Tax Act, we should calculate Trading Turnover for such income. It is also important to note that tax liability does not depend on Turnover. The trading turnover should be calculated only when the share trading income is considered as a business income and not when it is considered as capital gains income.

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FAQs

How to download the Tax P&L Statement from the Sharekhan portal?

You can download the Tax P&L Statement from the Sharekhan portal by navigating to Scrip Summary > Equity Scrip Summary (or any other Scrip Summary) section from the dashboard.

Is Trading Turnover the same as Contract Turnover?

No. Trading Turnover is different than Contract Turnover.
Contract Turnover is the sum of the purchase value and sales value. Hence, it is not considered for income tax purposes. Trading Turnover or Business Turnover is the absolute profit; that is the sum of positive and negative differences. This turnover is considered to determine the applicability of the tax audit and the applicable ITR form.

I am a trader. Which ITR Form do I need to file for my Income Tax Return?

Taxpayers having income from trading need to file ITR-2 or ITR-3 based on the nature of income from trading. Therefore, in the case of Capital Gains Income, file ITR-2, and in the case of Business Income, file ITR-3.

How to File ITR for Upstox?

A Upstox Trader has to file ITR based on the income they have from trading in equity, mutual funds, or derivatives. Upstox provides a Tax P&L Report to all its traders aggregating the trading transactions done during the financial year. Using the Tax P&L Report, the trader can determine which ITR Form to file and also determine the applicability of the Tax Audit. If you are a Upstox Trader and looking to file your ITR (Income Tax Return), you can refer to the detailed process below.

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Need helping to file your ITR? Don't worry, we can help you!
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Have you invested in F&O and Intraday?
Need helping to file your ITR? Don't worry, we can help you!
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Upstox Tax P&L Statement Tabs Explained

Therefore, as you can see from your image, your Tax P&L Statement contains the following columns:

  • Scrip Code/Scrip Name – It is a term used in the stock market where companies can sometimes pay dividends in the form of additional shares/stock rather than in money. It is also a written document that acknowledges the debt
  • The Buy/Sell/Balance sections contain details of the quantity, average and the amount
  • Close Rate – The exchange rate for two currencies at the end of a period of time, such as a trading day or month
  • Close Stock – Closing stock is the amount of inventory that business still has on hand at the end of a reporting period. This includes raw materials, work-in-process, and finished goods inventory. 
  • Net P/l, +P/-L – It refers to the values calculated from the realized and unrealized P&L section
  • Realized P&L – It refers to profit or loss on a completed trade
  • Unrealized P&L – It is the current profit or loss of an open position

Which ITR Form is Applicable for Upstox?

To file an ITR is an annual process, for Upstox traders. Based on the income situation, the taxpayer needs to file the prescribed ITR Form. The taxpayer should report incomes, calculate and pay taxes, claim TDS Credits and request refund for the overpayment of taxes while filing their ITR. The income tax department has notified ITR Forms based on different income situations. To know which ITR Form is applicable to you, use the below calculator. 

Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore
Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore

Taxpayers having income from trading need to file ITR-2 or ITR-3 based on the nature of income from trading. In the case of Capital Gains Income, file ITR-2 and in case of Business Income, file ITR-3.

Due Date for Filing ITR for Upstox

Income Tax Return(ITR) filing is done after the completion of a financial year. Due dates for ITR filing are as per section 139 of the income tax act. Due dates for different category of taxpayers are as follows:

Category

Due Date

Individuals to whom audit is not applicable

31st July of the Assessment Year

Companies

30th September of the Assessment Year

Individuals to whom audit is applicable

30th September of the Assessment Year

Individuals/ HUF who are partners in a firm and firm’s accounts are subject to audit

30th September of the Assessment Year

The above due dates can be extended by the IT Department via order.

Tax Audit Applicability

Stock Traders trade in shares, securities, commodities and currency through online trading platforms. Income from trading in Equity Intraday, Equity F&O, Commodity Trading and Currency Trading is considered as a Business Income. Thus, it is important to determine the applicability of Tax Audit as per the provisions of Income Tax Act.

Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore
Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore

The limit for turnover under Sec 44AB is Rs. 1 Cr. Under Budget 2020, the turnover limit under Sec 44AB has been increased from Rs. 1 Cr to Rs. 5 Cr if the following conditions are satisfied:

  1. Cash Payments do not exceed 5% of the Total Payments in the financial year
    AND
  2. Cash Receipts do not exceed 5% of the Total Receipts in the financial year

Calculation of Trading Turnover

Any person having income from trading in shares and securities should report it as income from business and profession. To determine the applicability of Tax Audit as per the Income Tax Act, we should calculate Trading Turnover for such income. It is important to note that tax liability does not depend on Turnover. The trading turnover should be calculated only when the share trading income is considered as a business income and not when it is considered as capital gains income.

Import Your Trades
File ITR Online

India’s fastest growing Tax Filing Platform

[Rated 4.8 stars by customers like you]

Import Your Trades

File ITR Online

India’s fastest growing Tax Filing Platform

[Rated 4.8 stars by customers like you]

FAQs

How to download the Tax P&L Statement from the Upstox portal?

You can download the Tax P&L Statement from the Upstox BO portal by navigating to Bill > Proft/Loss section from the dashboard. Apply the appropriate filters to download the specific statement you wish to download.

Is Trading Turnover the same as Contract Turnover?

No. Trading Turnover is different than Contract Turnover.
Contract Turnover is the sum of the purchase value and sales value. It is not considered for income tax purposes. Trading Turnover or Business Turnover is the absolute profit i.e. sum of positive and negative differences. This turnover is considered to determine the applicability of the tax audit and the applicable ITR form.

I am a trader. Which ITR Form do I need to file for my Income Tax Return?

Taxpayers having income from trading need to file ITR-2 or ITR-3 based on the nature of income from trading. In the case of Capital Gains Income, file ITR-2 and in case of Business Income, file ITR-3.

How to File ITR for Motilal Oswal?

A Motilal Oswal Trader has to file ITR based on the income they have from trading in equity, mutual funds, or derivatives. Motilal Oswal provides a Tax P&L Report to all its traders aggregating the trading transactions done during the financial year. Using the Tax P&L Report, the trader can determine which ITR Form to file and also determine the applicability of the Tax Audit. If you are a Motilal Oswal Trader and looking to file your ITR (Income Tax Return), you can refer to the detailed process below.

Have you invested in F&O and Intraday?
Need helping to file your ITR? Don't worry, we can help you!
[Rated 4.8 stars by customers like you]
Have you invested in F&O and Intraday?
Need helping to file your ITR? Don't worry, we can help you!
[Rated 4.8 stars by customers like you]

Tax P&L Statement Tabs Explained

You can view the profit and loss statements from the Motilal Oswal portal. Motilal Oswal doesn’t provide a consolidated tax profit and loss statement. Therefore, you have to toggle through their tabs as shown in the above image to view the statements from the different segments. Given below is the breakdown of the profit and loss statement tabs:

  • Average Sell Rate – The average selling price of goods or commodities is the average price at which a particular product or commodity is sold across channels or markets
  • Total Sell Value – The total amount of sales in a given period. Total sales revenue can be represented in several ways, but it is typically formulated as total number of units sold times price per unit 
  • Average Buy Rate – The average buying price of goods or commodities is the average price at which a particular product or commodity is bought across channels or markets
  • Realized Gains/Loss – Realized profit is the profit that comes from a completed trade; in other words, a trade that has been exited. Realized profit is usually already deposited into the trader’s trading account and can be withdrawn from their trading account to a bank account
  • Securities Transaction Tax (STT) – It is a tax payable in India on the value of securities (excluding commodities and currency) transacted through a recognized stock exchange

Which ITR Form is Applicable For Motilal Oswal traders?

To file an ITR is an annual process for Motilal Oswal trader. Based on the income situation, the taxpayer needs to file the prescribed ITR Form. The taxpayer should report incomes, calculate and pay taxes, claim TDS Credits and request refund for the overpayment of taxes while filing their ITR. The income tax department has notified ITR Forms based on different income situations. To know which ITR Form is applicable to you, use the below calculator. 

Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore
Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore

Taxpayers having income from trading need to file ITR-2 or ITR-3 based on the nature of income from trading. In the case of Capital Gains Income, file ITR-2 and in case of Business Income, file ITR-3.

Due Date for Filing ITR for Motilal Oswal traders

Income Tax Return(ITR) filing is done after the completion of a financial year. Due dates for ITR filing are as per section 139 of the income tax act. Due dates for different category of taxpayers are as follows:

Category

Due Date

Individuals to whom audit is not applicable

31st July of the Assessment Year

Companies

30th September of the Assessment Year

Individuals to whom audit is applicable

30th September of the Assessment Year

Individuals/ HUF who are partners in a firm and firm’s accounts are subject to audit

30th September of the Assessment Year

The above due dates can be extended by the IT Department via order.

Tax Audit Applicability

Stock Traders trade in shares, securities, commodities and currency through online trading platforms. For Income tax on tradingEquity Intraday, Equity F&O, Commodity Trading and Currency Trading are considered as a Business Income. Thus, it is important to determine the applicability of Tax Audit as per the provisions of Income Tax Act.

Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore
Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore

The limit for turnover under Section 44AB is Rs. 1 Cr. Under Budget 2020, the turnover limit under Sec 44AB has been increased from Rs. 1 Cr to Rs. 5 Cr if the following conditions are satisfied:

  1. Cash Payments do not exceed 5% of the Total Payments in the financial year
    AND
  2. Cash Receipts do not exceed 5% of the Total Receipts in the financial year

Calculation of Trading Turnover

Any person having income from trading in shares and securities should report it as income from business and profession. To determine the applicability of Tax Audit as per the Income Tax Act, we should calculate Trading Turnover for such income. It is important to note that tax liability does not depend on Turnover. The trading turnover should be calculated only when the share trading income is considered as a business income and not when it is considered as capital gains income.

Import Your Trades
File ITR Online

India’s fastest growing Tax Filing Platform

[Rated 4.8 stars by customers like you]

Import Your Trades

File ITR Online

India’s fastest growing Tax Filing Platform

[Rated 4.8 stars by customers like you]

FAQs

How to download the Tax P&L Statement from the Motilal Oswal portal?

You can download the Tax P&L Statement from the Motilal Oswal portal by clicking on the MO Genie option and selecting the Profit and Loss Statement option.

Is Trading Turnover the same as Contract Turnover?

No. Trading Turnover is different than Contract Turnover.
Contract Turnover is the sum of the purchase value and sales value. It is not considered for income tax purposes. Trading Turnover or Business Turnover is the absolute profit i.e. sum of positive and negative differences. This turnover is considered to determine the applicability of the tax audit and the applicable ITR form.

I am a trader. Which ITR Form do I need to file for my Income Tax Return?

Taxpayers having income from trading need to file ITR-2 or ITR-3 based on the nature of income from trading. In the case of Capital Gains Income, file ITR-2 and in case of Business Income, file ITR-3.

How to File ITR for Kotak Securities?

A Kotak Securities Trader has to file ITR based on the income they have from trading in equity, mutual funds, or derivatives. Kotak Securities provides a Tax P&L Report to all its traders aggregating the trading transactions done during the financial year. Using the Tax P&L Report, the trader can determine which ITR Form to file and also determine the applicability of the Tax Audit. If you are a Kotak Securities Trader and looking to file your ITR (Income Tax Return), you can refer to the detailed process below.

Promo Code
Tax Compliance for Kotak Securities Trader
Are you an Equity, Intraday, F&O or Commodities Trader? Upload your Tax P&L and file Tax Return online
[Rated 4.8 stars by customers like you]
Tax Compliance for Kotak Securities Trader
Are you an Equity, Intraday, F&O or Commodities Trader? Upload your Tax P&L and file Tax Return online.
[Rated 4.8 stars by customers like you]
Promo Code
Kotak

Tax P&L Report Tabs Explained

The above image is of the Kotak Equity segment statement. Kotak doesn’t provide a consolidated Tax P&L Statement. Hence, you have to download all the segments separately. The tabs included in the Tax P&L Statements are mentioned below:

  • Cost Basis – It is the original value of an asset for tax purposes, usually the purchase price, adjusted for stock splits, dividends and return of capital distributions
  •  Proceeds – Cash received from the sale of goods or services and can be discussed as gross or net
  • Square Off – It is a trading style used by investors/traders mostly in day trading, in which a trader buys or sells a particular quantity of an asset and later in the day reverses the transaction, in the hope of earning a profit

Which ITR Form is Applicable for Kotak Securities?

To file ITR is an annual process for Kotak Securities Traders. Based on the income situation, the taxpayer needs to file the prescribed ITR Form. The taxpayer should report incomes, calculate and pay taxes, claim TDS Credits and request refund for the overpayment of taxes while filing their ITR. The income tax department has notified ITR Forms based on different income situations. To know which ITR Form is applicable to you, use the below calculator. 

Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore
Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore

Taxpayers having income from trading need to file ITR-2 or ITR-3 based on the nature of income from trading. In the case of Capital Gains Income, file ITR-2 and in case of Business Income, file ITR-3.

Due Date for Filing ITR for Kotak Securities

Income Tax Return(ITR) filing is done after the completion of a financial year. Due dates for ITR filing are as per section 139 of the income tax act. Due dates for different category of taxpayers are as follows:

Category

Due Date

Individuals to whom audit is not applicable

31st July of the Assessment Year

Companies

30th September of the Assessment Year

Individuals to whom audit is applicable

30th September of the Assessment Year

Individuals/ HUF who are partners in a firm and firm’s accounts are subject to audit

30th September of the Assessment Year

The above due dates can be extended by the IT Department via order.

Tax Audit Applicability

Stock Traders trade in shares, securities, commodities and currency through online trading platforms. Income from trading in Equity Intraday, Equity F&O, Commodity Trading and Currency Trading is considered as a Business Income. Thus, it is important to determine the applicability of Tax Audit as per the provisions of Income Tax Act.

Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore
Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore

The limit for turnover under Sec 44AB is Rs. 1 Cr. Under Budget 2020, the turnover limit under Sec 44AB has been increased from Rs. 1 Cr to Rs. 5 Cr if the following conditions are satisfied:

  1. Cash Payments do not exceed 5% of the Total Payments in the financial year
    AND
  2. Cash Receipts do not exceed 5% of the Total Receipts in the financial year

Calculation of Trading Turnover

Any person having income from trading in shares and securities should report it as income from business and profession. To determine the applicability of Tax Audit as per the Income Tax Act, we should calculate Trading Turnover for such income. It is important to note that income tax on trading does not depend on Turnover. The trading turnover should be calculated only when the share trading income is considered as a business income and not when it is considered as capital gains income.

Have you invested in F&O and Intraday?
Need helping to file your ITR? Don't worry, we can help you!
[Rated 4.8 stars by customers like you]
Have you invested in F&O and Intraday?
Need helping to file your ITR? Don't worry, we can help you!
[Rated 4.8 stars by customers like you]

FAQs

How to download the Tax P&L Statement from Kotak Securities?

You can download the Tax P&L Statement from the Kotak Securities by navigating to Reports > Trades section from the dashboard. Apply the appropriate filters to download the specific statement you wish to download.

Is Trading Turnover the same as Contract Turnover?

Contract Turnover is the sum of the purchase value and sales value. It is not considered for income tax purposes. Trading Turnover or Business Turnover is the absolute profit i.e. sum of positive and negative differences. This turnover is considered to determine the applicability of the tax audit and the applicable ITR form.

I am a trader. Which ITR Form do I need to file for my Income Tax Return?

Taxpayers having income from trading need to file ITR-2 or ITR-3 based on the nature of income from trading. In the case of Capital Gains Income, file ITR-2 and in case of Business Income, file ITR-3.

How to File ITR for Zerodha?

A Zerodha Trader has to file ITR based on the income they have from trading in equity, mutual funds, or derivatives. Zerodha provides a Tax P&L Report to all its traders aggregating the trading transactions done during the financial year. Using the Tax P&L Report, the trader can determine which ITR Form to file and also determine the applicability of the Tax Audit. If you are a Zerodha Trader and looking to file your ITR (Income Tax Return), then you can refer to the detailed process below.

Promo Code
Zerodha
Tax Compliance for Zerodha
Trader
Are you an Equity, Intraday, F&O or Commodities Trader? Upload your Tax P&L and file Tax Return online
[Rated 4.8 stars by customers like you]
Tax Compliance for Zerodha Trader
Are you an Equity, Intraday, F&O or Commodities Trader? Upload your Tax P&L and file Tax Return online.
[Rated 4.8 stars by customers like you]
Promo Code
Zerodha
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Tax P&L Statement Tabs in Zerodha Explained

Therefore, as you can see from your image, your Tax P&L Statement is broken down into 7 different sections:

  • Equity Tax P&L Statement – consists of the following categories:
    • Equity Intraday – Trading in the stock cash market on a same-day basis. Thus, it would mean buying and selling on the same day itself.
    • Equity Delivery – Buying shares and holding them for a certain period of time is called delivery based trading. Hence, the shares you bought will be transferred in your Demat account. This consists of the following 2 sections:
      • Long term trades
      • Short term trades
  • Mutual Funds Tax P&L Statement
    • Debt Funds – Mutual funds that invest in fixed income securities for example bonds and treasury bills
    • Equity Mutual Funds – An equity fund is a mutual fund that invests principally in equity stocks example listed banks’ shares, FMCG, etc.
  • Futures and Options Tax P&L Statement
    • Equity Future – An agreement to buy or sell a specified quantity of underlying equity share for a future date at a price agreed upon between the buyer and seller
    • Equity Options – In essence, equity options work in an extremely similar way to other options, such as forex or commodities. They offer the trader the right, but not the obligation, to purchase (or sell) a set amount of shares at a certain level (referred to as the ‘strike price’) before it expires. To buy an option, traders will pay a premium
  • Commodity Tax P&L Statement
    • Commodities Futures – Agreements to buy or sell a raw material at a specific date in the future at a particular price
    • Commodities Options – Contract permitting the option buyer the right, without obligation, to buy or sell an underlying asset in the form of a commodity, such as precious metals, oil, or agricultural products, at a designated price until a designated date
  • Currency Tax P&L Statement
    • Currency Futures – Futures contract to exchange one currency for another at a specified date in the future at a price that is fixed on the purchase date; see Foreign exchange derivative
    • Currency Options – Currency option is a contract that gives the buyer the right, but not the obligation, to buy or sell a certain currency at a specified exchange rate on or before a specified date
  • Other Credits and Debits
    • This generally includes all charges and credits which are directly not associated with your trading activity
  • Equity Dividends Breakdown
    • A dividend is a token reward paid to the shareholders for their investment in a company’s equity. And therefore, it usually originates from the company’s net profits.

Explanation of Sub-Tabs of the Zerodha Tax P&L report

  • Realized Proft Breakdown
    • Realized profit is the profit that comes from a completed trade; in other words, a trade that has been exited. Realized profit is generally already deposited into the trader’s trading account. And it can be generally withdrawn from their trading account to a bank account.
  • Turnover Breakdown (Scripwise)
    • The definition of turnover is different for each type of trading transaction. Hence, in the case of Intraday Trading, the Turnover equals Absolute Profit. And, Absolute Profit is the sum of all positive and negative differences from all the transactions.
  • Other Debits/Credits including Service Tax
    • The other debits and credits include all charges and credits which are directly not associated with your trading activity. For example: some of the credits and debits can be explained as DP Charges, payment gateway charges, etc.
  • Account Head
    • Account head is generally a name under which particular types of transactions are recorded.
  • Short Term Trades
    • Short-term trading refers to trading strategies in the stock market or futures market in which the time duration between entry and exit is within a range of few hours to a few weeks. Hence it is referred to at as short term.
Have you invested in F&O and Intraday?
Need helping to file your ITR? Don't worry, we can help you!
[Rated 4.8 stars by customers like you]
Have you invested in F&O and Intraday?
Need helping to file your ITR? Don't worry, we can help you!
[Rated 4.8 stars by customers like you]

Which ITR Form is Applicable to Zerodha?

To file an ITR is an annual process for Zerodha Traders. Based on the income situation, the taxpayer needs to file the prescribed ITR Form. The taxpayer should report incomes, calculate and pay taxes, claim TDS Credits and request refund for the overpayment of taxes while filing their ITR. The income tax department has also notified ITR Forms based on different income situations. To know which ITR Form is applicable to you, you can use the below calculator. 

Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore
Check which ITR Form to file?
Income Tax Return Forms to file depends on your Income Source, Residential Status, and other financial situation. Know which ITR Form you should file.
Explore

Taxpayers having income from trading need to file ITR-2 or ITR-3 and this is based on the nature of income from trading. In the case of Capital Gains Income, file ITR-2 and in case of Business Income, file ITR-3.

Due Date to file ITR for Zerodha

Income Tax Return(ITR) filing is done after the completion of a financial year. So, the due dates for ITR filing are as per section 139 of the income tax act. Due dates for different category of taxpayers are as follows:

Category

Due Date

Individuals to whom audit is not applicable

31st July of the Assessment Year

Companies

30th September of the Assessment Year

Individuals to whom audit is applicable

30th September of the Assessment Year

Individuals/ HUF who are partners in a firm and firm’s accounts are subject to audit

30th September of the Assessment Year

Additionally: the above due dates can be extended by the IT Department via order.

Tax Audit Applicability for Zerodha

Stock Traders generally trade in shares, securities, commodities and currency through online trading platforms. For Income Tax on tradingEquity Intraday, Equity F&O, Commodity Trading and Currency Trading is considered as a Business Income. Thus, it is important to determine the applicability of Tax Audit as per the provisions of Income Tax Act.

Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore
Check Tax Audit Applicability u/s 44AB
Check Income Tax Audit applicability u/s 44AB to file Tax Audit Report Form 3CB - 3CD with your Income Tax Return.
Explore

The limit for turnover under Section 44AB is Rs. 1 Cr. Under Budget 2020, the turnover limit under Sec 44AB has been increased from Rs. 1 Cr to Rs. 5 Cr if the following conditions are satisfied:

  1. Cash Payments do not exceed 5% of the Total Payments in the financial year
    AND
  2. Cash Receipts do not exceed 5% of the Total Receipts in the financial year

Calculation of Trading Turnover for Zerodha

Any person having income from trading in shares and securities should report it as income from business and profession. Thus, to determine the applicability of Tax Audit as per the Income Tax Act, we should calculate Trading Turnover for such income. It is important to note that tax liability does not depend on Turnover. The trading turnover should be calculated only when the share trading income is considered as a business income and not when it is considered as capital gains income.

Import Your Trades
File ITR Online

India’s fastest growing Tax Filing Platform

[Rated 4.8 stars by customers like you]

Import Your Trades

File ITR Online

India’s fastest growing Tax Filing Platform

[Rated 4.8 stars by customers like you]

FAQs

How to download the Tax P&L Statement from the Zerodha Console?

You can download the Tax P&L Statement from the Zerodha Console after logging into the portal and navigating through Reports > Tax P&L from the dashboard. Zerodha provides its traders with the option of downloading the Tax P&L Statement for all the segments.

Is Trading Turnover the same as Contract Turnover?

No. Contract Turnover is the sum of the purchase value and sales value. It is not applicable for income tax purposes. Trading Turnover or Business Turnover is the absolute profit that is: sum of positive and negative differences. This turnover is to determine the applicability of the tax audit and the applicable ITR form. Therefore, Trading Turnover is different from Contract Turnover.

I am a trader. Which ITR Form do I need to file for my Income Tax Return?

Taxpayers having income from trading need to file ITR-2 or ITR-3 based on the nature of income from trading. In the case of Capital Gains Income, file ITR-2 and in case of Business Income, file ITR-3.