26 May 2015
can the NBFC company who is dealing in trading in purchase and sale of shares and also dealing in derivatives future and option and he is making loss pon F&o can these loss will be setoff against other business income??? like say company having interest on loan as a income so can these company setoff loss on F & O against interest on loan which is business income?
26 May 2015
Yes I am sure it is only day trading in shares is speculative but not derivative trading,
Income from intra-day trading in shares is treated as speculative business income as the transaction is settled without delivery. Accordingly, it is charged under the head, ‘Profit and gain of business or profession'. As per Section 43(5) of the Income Tax Act, 1961 speculative transaction means a transaction in which a contract for the purchase or sale of any commodity including stocks and shares is settled otherwise than by the actual delivery or transfer of the commodity or scrips.
However, trading in derivatives, referred to in Section 2(ac) of the Securities Contracts (Regulation) Act, 1956, carried out on a recognised stock exchange is not deemed to be a speculative transaction. Recognised stock exchanges are NSE, BSE, MCX Stock Exchange, and the United Stock Exchange of India. The transaction will be treated as ‘Non-speculative business income'.
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