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Taxation of Shares

28 August 2008 1,527 views No Comment
Hi all,
 
whether intraday sale of shares is taxable as speculation business income or Business income for the financial year 2006-2007?
 
regards,
sudhakaran



Hi Sudha,
In Indian context it is short term capital gain and it will come under the head capital gains.
Debashish



Hi Sudha,
 
your question for Its Speculation Business as you have not taken the delevery of the shares and is transfered on the same day. Only if The shares are received in your account and then transfered it refers as STCG and if you are regularly doing the business in shares then it will be treated as Speculation. There are many case laws in this issue.
Dayaniwas




I completely agree with Dayaniwas.

Regards
CA



Dear sir,
 
from your Answer
 
if he is doing some business then it will taxable as STCG. is it?
 
U/s 43(5) Derivative will not be taxable as business income  as per Amendment 2006
 
Is there any guidelines regarding that, pls give.
 
Thank for your answe
 
sudhakaran




Daily trading is a clear case of speculative transaction.

If it is derivative, to the best of my knowledge it is Business Income, notwithstanding his other engagements such as salary income or other business activity. so he cant pay at the rate of STCG. but definitely can claim rebate for STT.
 
in one of my client cases i have distributed portfolio in 2 categories and accordingly income in two categories of CG and BP.
 
i guess that makes things pretty much clear.
open for more discussion
CA



Income from intra day sale purchase of shares is speculation income, however if you doing it on daily basis or on a frequent basis then it is business income(provided you are having the proof of that like intra day purchase sale statements from brokers).

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