For FY 19-20 , As per Zerodha Varsity and Tax Laws , if your turnover is less than 1 crore and if your profit is less than 8% of turnover an audit is not required if your total tax liability for the year is zero. That means if your total income (Salary + Business income + capital gain) is less than Rs 2.5lks (minimum tax slab), you have no tax liability and hence audit not required. My Doubt : if total income > basic exemption limit , but net liability is zero since rebate u/s 87A is applicable, will tax audit be still applicable? in the tax law.

This is a loophole in the tax law in my opinion and causes inconvenience to small traders having income above basic exemption limit ,huge share trading losses and net tax liability as zero and still required to incur expenses for tax audit which is non-sensical.