19 September 2008
I am in job and also doing trading in shares. My yearly purchases is around Rs.50 lacs ( around 80 transactions) and sales is also Rs. 52 lacs having equall no. of transactions. Am I liable for Tax Audit u/s44AB or the whole thing will go into capital gain? Please light me on the issue.
20 September 2008
Please refer to the CBDT circular on investor vs trader. Based on the circular, if you are treated as trader, tax audit would apply as the income would be taxable under the head business
20 September 2008
Sir,if you treat your dealings in shares as business dealings then the provisions contained in section 44AB will apply and,therefore,you will be required to audit your books of account.But if you treat your purchasing of shares is investment then if you sell them within 12 months from the date of purchase,then it will be taxable as short term capital gain or short term capital loss under the heading"Income from capital gains"
CAclubindia
