Audit on Share Transactions

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2011 My primary source of income is salary of around Rs. 9 lacs. During FY 2010-'11, my share transaction (all short term) details are:

total purchase transactions: Rs. 72.37 lacs
total sale transactions: Rs. 72.26 lacs

total loss: Rs. 11 thousand

Now, please let me know the following:

1. My own capital was Rs. 60 thousand. Since I transacted on margin (i.e. on borrowed fund from brokerage firm) and there were around 100 transactions (45 purchase + 55 sale), total amounts of purchase & sale transactions both were above Rs. 72 lacs. In view of these details, is audit required for my share transactions?

2. Considering the above (& that 99.9% of my income came from salary), shall I consider the loss of Rs. 11,000 as Short Term Capital Loss? or, it is to be considered as loss from business?

Thanks

CA Suresh Jain

CA Suresh Jain (Expert)

24 July 2011 1. You need to get your accounts audited, and
2. The income is Business Income

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)

25 July 2011 Yes you have to get your accounts audited and claim the short term loss as carried forward to next year to ba adjusted against short term capital gain.

If the transaction of the shares are having the holding period of less then 15 days then it is to be treated as business income

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