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Home > Income Tax > Help Center > Tax Audit criteria, applicability & Calculator Last Updated: Dec 08th 2024

Income Tax Audit criteria, applicability & Calculator

Find Income Tax Audit applicability as an individual, business or a Company. Know more on tax audit criteria and applicability. Tax Audit Calculator ask basic questions, help you in revenue calculation for a stock market trader, business and give you the result. Considers factors like taxpayer type, entity type (Individual, Business, Firm, or Company, turnover, financial year, carry forward losses etc.

In case of futures & options trading covering brokers like Zerodha, ShareKhan, Upstox, Paytm, Groww, ICICI Direct, SBI Cap, 5paisa, Finavsia, Fyers, Angel One, Reliance, Alice Blue.   Updated per latest Union Budget 2024

   Who should consider an Income Tax Audit ?
A. SELECT OPTIONS
Financial Year (FY)
Taxpayer Type


B. TURNOVER
Turnover Type ?
Name of the Broker:
1. How to Download Tax P&L Statement?

Login to https://kite.zerodha.com/ with the login credentials > Once Dashboard Screen Go to top-right side menu Click Console > On the Console Welcome Screen Go to Reports Menu (top-right) Click on Tax P&L Select FY {{fy}}, from Q1 to Q4 Click on "Download Tax P&L report for all segments" link to download the excel report.

Login to https://www.sharekhan.com/ using credentials Select fifth (5th) tab "Reports" Click on "FNO transaction" link under "Transaction Report" Section Click on "TAX P&L" link in the 2nd level menu (last one) Now click on "TAX P&L DETAIL" Select "FNO" for Segment dropdown FY {{fy}} & Click "SHOW" Now Click on excel icon (2nd small icon) to download the tax P&L report in excel form.

Login to https://login.upstox.com/ with the login credentials (using registered mobile number & OTP On the Welcome Screen Select Reports Click on Profit & Loss option Click on Tax tab (3rd tab) Select FY {{fy}} Download Report in Excel.

Login to https://www.paytmmoney.com/ using Credentials Click on "Stocks" menu Enter passcode Go to Top-Right User menu or your photo Select "Statements" on the left side Select "Tax P&L" under "Statement Type" dropdown Select FY {{fy}} Click on Download button to download the Equity data in excel form.

Login to groww.in Click on "You" option on the top-right corner Choose SIP & Reports Click on "Capital Gain" Select FY {{fy}} Click on "Download" to download the Capital Gains Statement with Equity, MFs, Intraday data.

Login to https://secure.icicidirect.com/customer/login Click on " Portfolio " tab after Login Click on " P&L Statement " under Statements & Reports Select {{((brokerName=='ic')? '"Equity"' : '"Mutual Funds"')}} Select Period FY {{fy}} Click on View Download " Excel " (right hand side)

Login to https://trade.angelbroking.com/ using the credentials Click Reports in Welcome Screen Select Type of Report "P & L Summary" > Select "All" Select FY {{fy}} Click "Go" Click on Excel icon (green) at To-Left side of the screen > Use the Excel for upload and to populate trade data.

Login to https://www.reliancesmartmoney.com/ using the credentials On the Welcome Screen Go to top right corner and click on the user menu Click on Reports > On the left side menu Click on Historical Reports to expand Click on Profit & Loss Report at the end Select FY {{fy}} Select "Tax Profit & Loss at the right-side dropdown Click View Click on excel symbol on the right-side to download the excel report.

Goto https://bot.aliceblueonline.com/ Login with Credentials After Login Go to top-right user menu Click Back Office option Click on "Click here to Login" (blue button) Select the FY {{fy}} and click on Reports Click on "Global P&L Report" Here in the Global P&L Statement Section, click "View" Click on Excel at the left-middle of the screen to download the excel and use.

Login to https://login.5paisa.com/ using credentials on the left side panel menu, click on "My Reports" Click on Tax report under Portfolio Reports (left menu) Select Segment "Equity" / "Derivatives", Select "ALL" for List of traded instruments drop-down, Select FY {{fy}} Click on Green color Excel icon to download the report in Excel form.

Login to {{brokerName}} portal Go to Reports Menu Click on tax P&L Statement option Select for FY {{fy}} period Select futures, options, commodity, currency Download the report in Excel form.


2. How to Calculate Total Turnover?

After downloading the Tax P&L Statement in Excel .. go to F&Os, Currency, Commodity tabs in excel, add all of the 'Options turnover' and 'Futures turnover' amounts to arrive at the total turnover to determine the tax audit applicability.

Kindly go to F&O, Currency and Commodity Sheet and take the turnover as per Column U

a. Download ICICI Options and Option Plus Tradebook for F&O, Commodities and Currency and filter the Sell Transactions. Sum the Sell value and enter the amount in Sell Value of Options
b. Download the Profit and Loss report and take the absolute sum of Gains and losses and enter the amount

After downloading the {{brokerName}} portal's tax P&L statement in excel > Go to futures, options, commodity*, currency* tabs & add all the turnover and enter the amount below.

How to Calculate Total Turnover?

Business turnover can be calculated based on the business income earned and the income from the sale of assets and/or other non-sale revenue. Similarly, Professional turnover can be calculated based on the income received professional services rendered.

Total Turnover
{{totTurnoverStr}}
Turnover cannot be -ve amount. Check and Enter the correct turnover.
What is the Company turnover?

Company turnover: Total earned business income from sale of goods and/or services, sale of assets and/or other non-sale revenue. Refer revenue vs turnover FAQ in the below FAQ section. The parameters would be different for OPC, LLP, Private Limited Company.




C. Tax Audit CRITERIA to Consider
Turnover in {{turnTypeStr}} exceeds Rs {{tLimitStr}}
Cash receipts and Cash Payments exceeds 5% of the total Receipts and Payments. (As you selected trading, this wouldn't apply to you in general.)
Opted for presumptive taxation u/s 44AD / 44ADA (ITR-4 or ITR-3) in any of last 5 years but don't want to continue the same in current year
Filing after the original ITR due date and like to carry forward losses to future years
Any other reason to have the books audited?

Tax Audit not Applicable

For Companies

Statutory audit and income tax audit are two different audits. Above calculator determine the income tax audit. * For Companies: Annual Statutory Audit is needed irrespective of whether you need tax audit or not.

Private Limited Companies / OPC's are required to be mandatorily audited under Companies Act 2013 irrespective of the turnover

LLPs are required to be mandatorily audited under LLP Act if the turnover is more than Rs. 40 lakhs or partner contribution exceeds Rs. 25 lakhs

Share on

  1. Having F&O or Derivative Trading Losses or Gains? Check more on F&Os Expert ITR Filing
  2. Are you a founder / director of a Private Limited Company? Refer Private Limited Company Annual Compliance IT, ROC Audit Plan
  3. Running LLP Company as a managing director ? Refer LLP Annual Compliance IT, ROC Audit Plan

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Calculate your income tax using EZTaxIncome Tax Calculator (FY 2024-25)


Frequently asked Questions

1.How to select 'Turnover Type'?

Trading in stock markets turnover: You have traded F&Os, derivatives, and/or intraday trading

Business turnover: You have earned business income and sale of assets and/or other non-sale revenue

Professional turnover: You have received professional income from the services you have rendered

2.Revenue vs Turnover?

Revenue: Business earning money from sales of its goods or services.

Turnover: Business earning money from sales of its goods or services AND sale of non-business activity such as accounts receivable, changes to portfolio, sale of scrap, income from other non-business assets, sometimes sale of an asset, revision in inventory etc.

Note: Generally.. both the terms 'turnover' and 'revenue' are often used interchangeably.

Importance of Turnover: In case of trading in stock markets, turnover is the parameter that defines who should go through income tax audit

3.What is Tax Audit under Section 44AB?

Section 44AB under Income Tax Act 1961 mandates an audit of books of accounts by a chartered accountant in practice in the following scenarios.

  1. Businesses whose Total Sales / Turnover / Gross Receipts exceed Rs. 10 Crores during the previous year.
  2. Professional whose Gross Receipts exceed Rs. 50 Lakhs during the previous year. Per Budget 2023, threshold increased to Rs. 75 Lakhs
  3. Situations where an entity declaring profits lower than (6% of the turnover) what is deemed u/s 44AE, 44BB, 44BBB
  4. Situations where an entity declaring profits lower than (6% of the turnover) what is deemed u/s 44ADA / 44ADA and the income exceeds the basic exemption limit.
4.What would be the penalty if a Tax Audit under Section 44AB?

U/s 271B: If a tax audit was not conducted and reported in time, the penalty would be 0.5% of the turnover for a maximum of Rs. 1.5 Lakhs

U/s 271B: Penalty would be waived off in case there is a reasonable cause, such as

  1. Reassessed turnover by an expert tax consultant.
  2. Death or physical disability of partner in charge of accounts
  3. Damage to the books of accounts due to Fire, Theft, other natural calamity
  4. Delayed due to the tax audit for the earlier years is in-progress.
  5. Resource issues such as principal accountant unavailability etc.
5.What is considered as a 'Business' or 'Profession'?

Business: includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture.

Profession: includes jobs that require intellectual skills or manual skills supported by intellectual skills. Some of the disciplines include Medical, Engineering, Legal, Accountancy, Art, Acting, Architectural, Interior designing, Company Secretarial, Other Technical.

6.Process of a Tax Audit ?

The process generally takes around 5-10 business days, below is the list of high level activities

  1. Share the documents as per your sources of income
  2. If you are using EZTax.in CA for the first time, we will go through the auditor appointment process that may require an NOC from the previous auditor.
  3. Team will prepare the DSC (Digital Signature Certificate, if not available already)
  4. Team will prepare ITR
  5. Complete the Audit, and prepare Form 3CA / 3CB, and 3CD (Auditor Observation Report)
  6. Upon reading the reports, based on your consent the team will upload for your approval
  7. The auditor will upload the tax audit report along with the Balance sheet, profit and loss statement.
7.Once a person gets the account audited, does the same person need to go thru Tax Audit again in the following year?

It's not required to go through a Tax Audit next year, unless such person met the criteria for tax audit again as per section 44AB. Rules for Companies and co-operative societies follow different rules.

8.Due date for tax audit ?

An individual or a company going through tax audit u/s 44AB should get the accounts audited on or before 30th Sep for the previous financial year . Check the EZTax.in Tax Calendar for the latest update.



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Disclaimer: This article provides an overview and general guidance, not exhaustive for brevity. Please refer Income Tax Act, GST Act, Companies Act and other tax compliance acts, Rules, and Notifications for details.