Tax Audit Turnover in Case of Share Trading | Saral Tax India | सरल टैक्स इंडिया

Tax Audit Turnover in Case of Share Trading

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Tax Audit Turnover in Case of Share Trading For all delivery-based transactions, where you buy stocks and hold them for more than 1 day and sell them,

Share Trading Turnover for tax audit under Section 44AB

Delivery based transactions

For all delivery-based transactions, where you buy stocks and hold them for more than 1 day and sell them, the total value of the sales is to be considered as turnover. So if you bought 100 Reliance shares at Rs 800 and sold them at Rs 820, the selling value of Rs 82000 (820 x 100) can be considered as turnover.

But remember that the above calculation of turnover for delivery trades is only applicable if you declare equity delivery-based trades as a business income. If you declared them as capital gains or investments, there is no need to calculate turnover on such transactions. Also, there is no need for an audit if you have only capital gains irrespective of turnover or profitability.

Speculative transactions (Intraday equity trading)

For all speculative transactions, the aggregate or absolute sum of both positive and negative differences from all trades is to be considered as turnover. So if you buy 100 shares of Reliance at 800 in the morning and sell at 820 by afternoon, you make a profit or positive difference of Rs 2000, this Rs.2000 can be considered as turnover for this trade.

Non-speculative transactions (Futures and options)

For all non-speculative transactions, the article says that turnover is to be determined as follows –
  • The total of favourable and unfavourable differences shall be taken as turnover
  • Premium received on sale of options is also to be included in turnover
  • In respect of any reverse trades entered, the difference thereon should also form part of the turnover.
So if you buy 25 units or 1 lot of Nifty futures at 8000 and sell at 7900, Rs.2500 (25 x 100) the negative difference or loss on the trade is turnover.
Tax Audit Turnover in Case of Share Trading
Tax Audit Turnover in Case of Share Trading

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Saral Tax India | सरल टैक्स इंडिया: Tax Audit Turnover in Case of Share Trading
Tax Audit Turnover in Case of Share Trading
Tax Audit Turnover in Case of Share Trading For all delivery-based transactions, where you buy stocks and hold them for more than 1 day and sell them,
Saral Tax India | सरल टैक्स इंडिया
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