What turnover amount requires a tax audit?

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• Transactions where you buy and hold a stock for more than 1 day.
• A tax audit is applicable only if you declare delivery-based equity trades as a business income. 
• If you declare your trades as capital gains or investments, it is not required to calculate your turnover, nor is a tax audit required (irrespective of the turnover or profitability).
• Turnover (for tax audit of delivery-based trades) = Total value of sales
• In the example given below, the turnover for tax will be Rs. 45,000

Stock	Buy Value	Sell Value	Profit/Loss	Turnover  (for tax)
SBIN	10,000	20,000	10,000	20,000
HDFC	30,000	25,000	- 5,000	25,000
Total	40,000	45,000	5,000	45,000

• Intraday equity trading
• Turnover = Absolute sum of profits and losses
• In the example given below, the turnover for tax will be Rs. 15,000

Stock	Buy Value	Sell Value	Profit/Loss	Turnover  (for tax)
Reliance	55,000	60,000	5,000	5,000
SBIN	50,000	40,000	-10,000	10,000
Total	1,55,000	1,00,000	-5,000	15,000

• Turnover = Absolute sum of profits and losses 
• In the example given below, the turnover for tax will be Rs. 15,000

Stock	Buy Value	Sell Value	Profit/Loss	Turnover  (for tax)
Nifty Futures	1,50,000	1,55,000	5,000	5,000
Bank Nifty Futures	1,20,000	1,10,000	-10,000	10,000
Total	2,70,000	2,65,000	-5,000	15,000

• Turnover = Absolute sum of profits and losses
• In the example given below, the turnover for tax will be Rs. 5,500

Position	Buy Value	Sell Value	Profit/Loss	Turnover  (for tax)
1	2.500	5,000	2,500	2,500
2	6,000	4,500	-1,500	1,500
3	3,000	4,500	1,500	1,500
Total	11,500	14,000	2,500	5,500