{"id":33091,"date":"2026-09-10T01:11:16","date_gmt":"2026-09-09T19:41:16","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=33091"},"modified":"2026-09-10T01:29:30","modified_gmt":"2026-09-09T19:59:30","slug":"tax-audit-applicability-for-fo-traders-ay-2026-27","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/","title":{"rendered":"Tax Audit Applicability for F&#038;O Traders \u2013 AY 2026-27"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6aa1bd1918456\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6aa1bd1918456\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#Tax_Audit_Applicability_for_F_O_Traders_%E2%80%93_AY_2026-27_FY_2025-26\" title=\"Tax Audit Applicability for F&amp;O Traders \u2013 AY 2026-27 (FY 2025-26)\">Tax Audit Applicability for F&amp;O Traders \u2013 AY 2026-27 (FY 2025-26)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#Case_A_F_O_Trader_Opting_for_Section_44AD\" title=\"Case A: F&amp;O Trader Opting for Section 44AD\">Case A: F&amp;O Trader Opting for Section 44AD<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#Case_B_F_O_Trader_Not_Opting_for_Section_44AD\" title=\"Case B: F&amp;O Trader Not Opting for Section 44AD:\">Case B: F&amp;O Trader Not Opting for Section 44AD:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#Important_Notes_Mentioned_in_the_Chart\" title=\"Important Notes Mentioned in the Chart\">Important Notes Mentioned in the Chart<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#How_is_F_O_turnover_calculated\" title=\"How is F&amp;O turnover calculated?\">How is F&amp;O turnover calculated?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#We_observed_the_following_common_mistakes_in_F_O_turnover_calculated\" title=\"We observed the following common mistakes in F&amp;O turnover calculated:\">We observed the following common mistakes in F&amp;O turnover calculated:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#Also_found_few_common_errors_during_audit\" title=\"Also found few common errors during audit\">Also found few common errors during audit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#Practical_Examples\" title=\"Practical Examples\">Practical Examples<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#Key_Takeaway_for_F_O_Traders\" title=\"Key Takeaway for F&amp;O Traders\">Key Takeaway for F&amp;O Traders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#Key_Takeaways_for_Tax_Audit\" title=\"Key Takeaways for Tax Audit\u00a0\">Key Takeaways for Tax Audit\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#For_Business_44AD\" title=\"For Business (44AD)\">For Business (44AD)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#Simple_Rule\" title=\"Simple Rule\">Simple Rule<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/tax-audit-applicability-for-fo-traders-ay-2026-27\/#For_Profession\" title=\"For Profession\">For Profession<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-33096\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Applicability-Decision-Tree.jpg\" alt=\"Tax Audit Applicability Decision Tree\" width=\"1005\" height=\"1280\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Applicability-Decision-Tree.jpg 1005w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Applicability-Decision-Tree-236x300.jpg 236w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Applicability-Decision-Tree-804x1024.jpg 804w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Applicability-Decision-Tree-768x978.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Applicability-Decision-Tree-800x1019.jpg 800w\" sizes=\"(max-width: 1005px) 100vw, 1005px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Tax_Audit_Applicability_for_F_O_Traders_%E2%80%93_AY_2026-27_FY_2025-26\"><\/span><span style=\"color: #000080;\"><strong>Tax Audit Applicability for F&amp;O Traders \u2013 AY 2026-27 (FY 2025-26)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A futures &amp; options (F&amp;O) trader is required to get a tax audit under Section 44AB of the Income Tax Act. Since F&amp;O trading is generally treated as non-speculative business income, tax audit provisions applicable to business income apply.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Case_A_F_O_Trader_Opting_for_Section_44AD\"><\/span><span style=\"color: #000080;\"><strong>Case A: F&amp;O Trader Opting for Section 44AD<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li><span style=\"color: #000080;\"><strong> Turnover up to INR 1 Crore: <\/strong><\/span>Tax Audit Position No Audit Required. U\/s 44AD(5) provisions become applicable due to lower profit declaration and other conditions.<\/li>\n<li><span style=\"color: #000080;\"><strong> Turnover Above INR 1 Crore up to INR 2 Crore<\/strong><\/span><\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Profit Declared at 6% \/ 8% or More: No Tax Audit<\/li>\n<li>Profit Below 6% \/ 8% or Loss: If Income exceeds the basic exemption limit, and Conditions of Section 44AD (5) apply, then a tax audit is required. Example: Turnover: INR 1.50 Crore and Profit declared: INR 12 Lakh (8%) Then no audit, but If profit is declared: INR 2 Lakh, audit may become applicable.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol start=\"3\">\n<li><span style=\"color: #000080;\"><strong> Turnover Above INR 2 Crore Up to INR 3 Crore<\/strong><\/span><\/li>\n<\/ol>\n<p style=\"padding-left: 40px;\">Applicable where cash receipts do not exceed 5%.<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Profit \u2265 6% \/ 8%: No Audit<\/li>\n<li>Lower Profit or Loss: And income exceeds exemption limit. Audit Applicable<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol start=\"4\">\n<li><span style=\"color: #000080;\"><strong> Turnover Above INR 3 Crore up to INR 10 Crore<\/strong><\/span><\/li>\n<\/ol>\n<p style=\"padding-left: 40px;\"><span style=\"color: #000080;\"><strong>Section 44AD Not Available: <\/strong><\/span>The presumptive scheme under Section 44AD cannot be used. However, if cash receipts \u2264 5% of total receipts and cash payments are \u2264 5% of total payments, then no audit is required up to INR 10 crore turnover.<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Turnover Above INR 10 Crore: Tax Audit Compulsory: No exception. Whether profit, loss, or Digital transactions the audit is mandatory.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Case_B_F_O_Trader_Not_Opting_for_Section_44AD\"><\/span><span style=\"color: #000080;\"><strong>Case B: F&amp;O Trader Not Opting for Section 44AD:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-33092\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/photo_2026-09-10_00-44-42.jpg\" alt=\"Tax Audit Applicability for F&amp;O Traders\" width=\"944\" height=\"1280\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/photo_2026-09-10_00-44-42.jpg 944w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/photo_2026-09-10_00-44-42-221x300.jpg 221w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/photo_2026-09-10_00-44-42-755x1024.jpg 755w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/photo_2026-09-10_00-44-42-768x1041.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/photo_2026-09-10_00-44-42-800x1085.jpg 800w\" sizes=\"(max-width: 944px) 100vw, 944px\" \/><\/h2>\n<p>This is the most common situation for active F&amp;O traders.<\/p>\n<ul>\n<li>Turnover up to INR 1 Crore, then no audit.<\/li>\n<li>Turnover Between INR 1 Crore and INR 10 Crore : When: Cash Receipts \u2264 5% or Cash Payments \u2264 5% then No Audit<\/li>\n<li>This is because the enhanced tax audit limit under Section 44AB increases to INR 10 Crore.<\/li>\n<li>Otherwise: Audit Applicable if turnover exceeds INR 1 Crore.<\/li>\n<li>Turnover Above INR 10 Crore: Audit Mandatory: Regardless of Profit, Loss and Nature of trading<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Important_Notes_Mentioned_in_the_Chart\"><\/span><span style=\"color: #000080;\"><strong>Important Notes Mentioned in the Chart<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>INR 3 Crore Limit Under Section 44AD. Only cash receipts are tested. If cash receipts exceed the prescribed limit, the higher threshold under Section 44AD may not be available.<\/li>\n<li>INR 10 Crore Limit Under Section 44AB: Both are tested: Cash Receipts \u2264 5% and Cash Payments \u2264 5% , Only then can the enhanced INR 10 Crore audit threshold be claimed.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"How_is_F_O_turnover_calculated\"><\/span><span style=\"color: #000080;\"><strong>How is F&amp;O turnover calculated?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>For F&amp;O traders, turnover is not the contract value. Turnover is calculated as The absolute profits and losses are considered.<\/li>\n<li>F&amp;O Turnover = Absolute Profit from all trades + Absolute Loss from all trades + Premium received on sale of options (if any) + Difference on reverse trades<\/li>\n<li>Following documents should be obtained for audit or ITR purposes: collect the tax P&amp;L report, F&amp;O turnover report, broker ledger, annual transaction statement, bank statement, demat statement, and AIS\/TIS verification.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"We_observed_the_following_common_mistakes_in_F_O_turnover_calculated\"><\/span><span style=\"color: #000080;\"><strong>We observed the following common mistakes in F&amp;O turnover calculated:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Considering contract value as turnover.<\/li>\n<li>Taking net profit as turnover.<\/li>\n<li>Ignoring the option premium received.<\/li>\n<li>Netting off profits and losses.<\/li>\n<li>Using broker ledger balance instead of absolute profit\/loss.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Also_found_few_common_errors_during_audit\"><\/span><span style=\"color: #000080;\"><strong>Also found few common errors during audit<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Error-1: Using Contract Value and Contract Value is never turnover.<\/li>\n<li>Next Error-2: Using Net Profit<\/li>\n<li>Error-3: Ignoring Option Premium. Option writers often miss premium received while computing turnover.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Practical_Examples\"><\/span><span style=\"color: #000080;\"><strong>Practical Examples<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><strong>Example 1<\/strong><\/p>\n<ul>\n<li>Turnover: INR 75 Lakh<\/li>\n<li>Profit: INR 3 Lakh<\/li>\n<li>All transactions through broker and bank.<\/li>\n<li>No Audit<\/li>\n<\/ul>\n<p><strong>Example 2<\/strong><\/p>\n<ul>\n<li>Turnover: INR 5 Crore<\/li>\n<li>Cash Receipts: Nil<\/li>\n<li>Cash Payments: Nil<\/li>\n<li>No Audit, Since turnover is below INR 10 Crore and cash transactions are within 5%.<\/li>\n<\/ul>\n<p><strong>Example 3<\/strong><\/p>\n<ul>\n<li>Turnover: INR 8 Crore<\/li>\n<li>Cash Receipts: 12%<\/li>\n<li>Audit Applicable<\/li>\n<li>Because the 5% cash condition is violated.<\/li>\n<\/ul>\n<p><strong>Example 4<\/strong><\/p>\n<ul>\n<li>Turnover: INR 12 Crore<\/li>\n<li>Cash Receipts: Nil<\/li>\n<li>Cash Payments: Nil<\/li>\n<li>Audit Compulsory Because turnover exceeds INR 10 Crore.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Key_Takeaway_for_F_O_Traders\"><\/span><span style=\"color: #000080;\"><strong>Key Takeaway for F&amp;O Traders<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-33099\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Limit-AY-2026-27.png\" alt=\"Tax Audit Limit AY 2026-27\" width=\"2339\" height=\"1500\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Limit-AY-2026-27.png 2339w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Limit-AY-2026-27-300x192.png 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Limit-AY-2026-27-1024x657.png 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Limit-AY-2026-27-768x493.png 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Limit-AY-2026-27-1536x985.png 1536w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Limit-AY-2026-27-2048x1313.png 2048w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2026\/09\/Tax-Audit-Limit-AY-2026-27-800x513.png 800w\" sizes=\"(max-width: 2339px) 100vw, 2339px\" \/><\/p>\n<ul>\n<li>No tax audit if turnover is up to INR 10 crore and both cash receipts and cash payments do not exceed 5%.<\/li>\n<li>Tax audit is compulsory once turnover exceeds INR 10 crore.<\/li>\n<li>Traders opting for Section 44AD and declaring profit below the prescribed presumptive rate may trigger tax audit requirements. Since most F&amp;O transactions are routed through brokers and banking channels, many F&amp;O traders can avail the higher INR 10 crore tax audit threshold.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Key_Takeaways_for_Tax_Audit\"><\/span><span style=\"color: #000080;\"><strong>Key Takeaways for Tax Audit\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"For_Business_44AD\"><\/span><span style=\"color: #000080;\"><strong>For Business (44AD)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p dir=\"ltr\">44AD eligibility: turnover up to INR 2 crore (INR 3 crore for digital business, i.e., cash dealings within 5% of total receipts\/payments), excluding commission, brokerage, and agency businesses.<\/p>\n<ul dir=\"ltr\">\n<li>If opted for 44AD: no audit required.<\/li>\n<li>In case not opted and turnover exceeds INR 1 crore (INR 10 crore for digital business): audit required.<\/li>\n<li>If not opted and turnover is within those limits: check profit \u2014\n<ul dir=\"ltr\">\n<li>Never opted for 44AD earlier: maintain books, audit not required.<\/li>\n<li>Opted for 44AD in any earlier previous year, but profit this year is below the 44AD-prescribed limit: the &#8220;punishment clause&#8221; kicks in \u2014 audit required if total income exceeds the basic exemption limit in that year.<\/li>\n<li>Profit above the prescribed limit: no audit.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>No audit up to INR 10 crore if:<\/p>\n<ul>\n<li>Cash receipts \u2264 5%<\/li>\n<li>In case Cash payments \u2264 5%<\/li>\n<li>Audit is mandatory if turnover exceeds \u20b910 crore.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Simple_Rule\"><\/span><span style=\"color: #000080;\">Simple Rule<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Business: Turnover \u2264 \u20b910 Crore + Cash Receipts \u2264 5% + Cash Payments \u2264 5% = No Tax Audit<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"For_Profession\"><\/span><span style=\"color: #000080;\">For Profession<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p dir=\"ltr\">Specified professions covered: legal, medical, engineering, architecture, accountancy, technical consultancy, interior decoration, and similar notified professions (advocate, CA, film artist, etc.).<\/p>\n<p dir=\"ltr\">44ADA eligibility: turnover up to INR 50 lakh (INR 75 lakh if it&#8217;s a &#8220;digital business&#8221;\u2014cash receipts\/payments each restricted to 5% or less of total receipts\/payments).<\/p>\n<ul>\n<li>No audit up to INR 50 lakh.<\/li>\n<li>U\/s 44ADA, audits can be avoided up to INR 75 lakh if cash receipts do not exceed 5%.<\/li>\n<li>Audit applies when professional receipts exceed the prescribed limits<\/li>\n<li>Profession: Gross Receipts \u2264 INR 75 Lakh + Section 44ADA + Cash Receipts \u2264 5% = No Tax Audit Otherwise, a tax audit u\/s 44AB may be applicable.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\">Simple Rule.<\/span><\/p>\n<ul>\n<li>Trader F&amp;O Turnover \u2264 INR 10 Crore + Cash Receipts \u2264 5% + Cash Payments \u2264 5% = Generally No Tax Audit.<\/li>\n<li>F&amp;O Turnover &gt; INR 10 Crore = Tax Audit Mandatory.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Tax Audit Applicability for F&amp;O Traders \u2013 AY 2026-27 (FY 2025-26) A futures &amp; options (F&amp;O) trader is required to get a tax audit under Section 44AB of the Income Tax Act. Since F&amp;O trading is generally treated as non-speculative business income, tax audit provisions applicable to business income apply. Case A: F&amp;O Trader Opting &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/33091"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=33091"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/33091\/revisions"}],"predecessor-version":[{"id":33102,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/33091\/revisions\/33102"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=33091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=33091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=33091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}