01 October 2009
one of my friend bought shares for intraday and sold in the same day for loss.but again he purchased shares on delivery call and sold on profit.now the auditor is telling to pay tax on the profit.he is telling loss done in intraday cannot be adjusted with profit made in delivery call..so plz tel me the exact ans...
01 October 2009
Your auditor is wrong in making such arguement.
Under Income Tax Act, there is only short term and long term concept. Intraday, delievery etc is not defined out there.
If you buy and sell the shares same day for loss it will be short term capital loss. If you buy the shares and take delievery and sell it for profit in less than 12 months of purchase date, then it will be short term capital gain. Both, the loss and gain made have to be netted off with each other.
Further, even if your friend purchased shares on delievery and sold it after 12 months from the date of purchase, then it becomes long term capital gains and that can be adjusted against short term capital gains.
So the question of paying tax on profit maade on sale of shares in above case does not arise.
CAclubindia
