Loss in Currency Trading

This query is : Resolved 

(Querist) 16 December 2010

A company has incurred the huge loss in currency trading from NSE. What will be the tax implications? Whether the same will be treated as speculation loss in terms of Section 43(5)read with Section 73 of the Income Tax Act, 1961?

CA Manikandan.A.V (Expert) 16 December 2010

Currency traidng is speculation only. Any trading in derivative in which delivery is not there is speculation only.

Ravi Kumar Jain (Querist) 16 December 2010

But as per Sec 43(5)the derivative transactions done through a recognised stock exchange shall not be treated as speculative transactions and as far as I know the NSE is a recognised stock exchange for derivative transactions.

Aditya Maheshwari (Expert) 16 December 2010

Currency trading is non speculation loss as per 43(5).

Ravi Kumar Jain (Querist) 17 December 2010

Thnks. But I want to know whether that loss will be allowed to be setoff against the interest income or other business income as per Section 73

Aditya Maheshwari (Expert) 17 December 2010

Yes as it is normal business loss.

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