Answer

1. F

   Facts

   F&O trading is a business, and Sec 44AD is technically available if turnover is within its limits, at 6% of turnover received digitally. But declaring 6% of turnover when you actually made a loss raises your tax, and later declaring a loss after opting in can trigger audit and a five-year bar.

2. P

   Provisions and law

   • Sec 44AD (now Sec 58)Presumptive business income
   • Sec 44AB (now Sec 63)Tax audit if business turnover exceeds ₹1 crore, or ₹10 crore where cash receipts and payments are each within 5%
3. A

   Analysis

   With turnover of ₹50 lakh, 6% is ₹3,00,000 of income, even if real trading lost money. If you opt in this year and next year declare a loss with total income above the basic exemption, audit applies and you are out of the scheme for five years. Most traders with volatile results are better off filing ITR-3 on actual results. Use 44AD only after weighing these effects.

4. C

   Conclusion

   1. 1Compare 6% of turnover with your actual result
   2. 2Consider the five-year effect of opting in and out
   3. 3Prefer actual results in ITR-3 if income swings
   4. 4Take advice before choosing 44AD for trading

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.