Question
How is turnover calculated for tax audit and 44AD, including F&O?
Answer
Bottom line: For F&O, turnover is the absolute total of profits and losses — not the contract value — and it decides your audit limit.
1. F&O turnover
Per the ICAI guidance, add up the absolute value of each favourable and unfavourable difference; that sum is your turnover.
2. Audit limits
Tax audit applies above ₹1 crore turnover (₹10 crore if cash is 5% or less); 44AD presumptive applies up to ₹2 crore (₹3 crore if cash is 5% or less).
3. Why it matters
Small traders can breach the audit limit even on modest capital.
Compute it with our F&O Turnover & Audit Calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.