Stamp Vendor Turnover, Income Tax

[KUMAR Narasimhan]

Dear Sir / Madam,

A stamp Vendor who has taken stamp paper licensed from Govt and selling the Stamp Paper to his customers.

Question no 1:

He Sells close to 6 Crore worth of stamp paper in a Financial year and generated a profit of ₹ 6 Lakh from it, meaning 1% is profit.

In this case should he needs to do a Tax Audit for the respective Financial year?

Question no 2:

He deposited the worth of 5.3 crore cash deposit ( Collected the cash from Customer) to purchase the stamp paper.

Shall we show this transaction as purchase and sales, meaning as a Trade or we can show this as Commission amount alone to prepare the Financial.

Please clarify

Posts / Replies

[ARVIND JAIN]

Option 1 seems to be safer as the cash deposit amount is high.