How is turnover calculated in Tax P&L and how do I know if I need an audit?
The turnover is being calculated in Q just to determine if you need a tax audit or not. We are following guidance note on Tax audit under section 44AB.
- For Intraday equity — absolute sum of settlement profits and losses per scrip
- For Delivery equity — sell side value of the stock
- For F&O (Equity, Currency, Commodity) — the absolute sum of settlement profits & losses for F&O) per scrip and the sell side value of option contract.
An audit is required if,
- Turnover for financial year is > ₹1 crore
- If turnover < ₹1 crore and profitability is less than 8% of turnover (Section 44 AB)