Answer

1. F

   Facts

   Tax audit applies if business turnover exceeds ₹1 crore, raised to ₹10 crore where cash receipts and cash payments are each within 5% of totals. F&O is settled through banks, so most traders get the ₹10 crore limit.

2. P

   Provisions and law

   • 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%
   • Sec 44AD (now Sec 58)Presumptive business income; declaring lower can trigger audit
3. A

   Analysis

   With ₹3 crore turnover, all through bank, you are under ₹10 crore, so audit is not needed on turnover grounds. Audit can still apply in the Sec 44AD case: if you opted for presumptive income in any of the earlier five years and now declare a loss or low profit with total income above the basic exemption. Check your past returns.

4. C

   Conclusion

   1. 1Compute total business turnover
   2. 2Confirm cash receipts and payments are each within 5%
   3. 3Check whether you used Sec 44AD in the earlier five years
   4. 4Get the audit done only if a condition applies

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