Comment on Notice under Section 139(9)? - Possible reason
commented on
26 Jul 2014, 11:49 PM
Nithin an important part of the information you have been giving is wrong!
Please refer this link, especially the example 1 and 2 given in the last part.
http://www.simpletaxindia.net/2013/08/tax-audit-mandatory-if-turnover-of.html
If a person’s total income is below taxable limit (i.e. if his income is less than 2 lacs) and he made a loss in F&O, he does not need to get his book audited. He will not receive any notice under section 139(9). Section 44AD under which notices are sent is applicable only and only if total income is greater than the maximum amount that is not chargeable to income tax, which is 2 lacs for FY 2013-2014.
1) So, for example if a housewife trades with zerodha, has a 20,000 loss on a turnover of 10 lacs, she can just file using ITR4 claiming a loss of 20,000, without the need for an audit. She will not receive any notice from IT department. No need to say you made a 8% profit.
2) If a salaried person trades and his total income from salary is 1.8 lacs (@ 15,000 per month) and he makes a profit of 10,000. His total income now is 1.9 lacs. He does not need audit as his total income from all sources is below 2lacs.
Audit is only required when your total income is greater than 2 lacs.
I think this is an extremely important information and should be communicated to all your clients. This will save at least some clients the headache and expenses of getting a tax audit. With Thanks.