[aaykarbhavan] whether person doing few transaction under F &O segment also covered by section 44AD

Dear Friends,

As per Section 44AD every eligible assessee carrying on an eligible business having turnover equal to or less than Rs. 1 Crore would be covered and his/her income will be computed at 8% of the gross turnover or gross receipts unloess he declares a lower income and gets his accounts audited. As per my understanding the income earned from transactions done in the F&O segment is business income even if only a few transactions have been undertaken by the person. Please correct me if I am wrong.

Now consider the case of a person who undertakes a few transactions in the Future & Options segment of a Stock Exchange:

1. The gross turnover in his case would be the value of the premium in the buy and sell transactions. The total value of the contract will not be considered for calculating the turnover.

2. The income that he makes would be the net result of all the losses and profits earned in such buy and sell transactions.

Now if the total turnover is only Rs. 1,00,000 and he has suffered a net loss of 24,000 then whether he would also need to get his accounts audited as otherwise he would be presumed to have earned an income of Rs. 8000 ( being 8% of the gross turnover).

Best regards

Vaibhav Chaudhry

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