Comment on Taxation Simplified

KRS commented on 09 Jun 2013, 06:47 PM

Dear Zerodha Team,
Thank you for checking on checking on applicability of section 44AD for small traders. While it does make sense that audit could be mandatory under section 44AD if the assesse if declaring less that 8% of turnover (which includes loss), I just chanced upon a small information that could saves some of us small traders from the hassle of audit even if a trading loss(F&O) is declared as long as they also have salaried income and have shown deductions under Chapter VIA . As per the definition of eligibile assesse below, some of traders who have both salary income and F&O trading income(profit or loss) wouldn’t meet the criteria since they usually have deductions in their salary under Chapter VIA like section 80C, 80CCC,80CCD,etc. Could you please comment on my observation above so that many small traders having both salary and trading income can avoid an unnecessary audit?
Explanation.—For the purposes of this section 44AD,—
(a) “eligible assessee” means,—
(i) an individual, Hindu undivided family or a partnership firm, who is a resident, but not a limited liability partnership firm as defined under clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); and
(ii) who has not claimed deduction under any of the sections 10A,10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading “C. – Deductions in respect of certain incomes” in the relevant assessment year;

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