Business or capital gain
This query is : Resolved
TEENA NAGADA
(Querist)
21 October 2014
FACTS OF THE CASE
1. CLIENT IS AN INVESTOR AND NOT BIG TRADER
2. HE HAD MARGIN FUNDING FOR INVESTMENT HE HELD
3. HE HAS FEW INTRADAY TRANSACTIONS AND OTHER FEW ARE SHORT TERM
4. FREQUENCY OF TRANSACTIONS ARE 150 TRANSACTION IN A YEAR
QUERY???
WHTHER LONG TERAM CAPITAL GAIN BE DENIED ON THE GROUND THAT MARGIN FUNDING USED AND TRAT IT AS A BUSINESS?
1. CLIENT IS AN INVESTOR AND NOT BIG TRADER
2. HE HAD MARGIN FUNDING FOR INVESTMENT HE HELD
3. HE HAS FEW INTRADAY TRANSACTIONS AND OTHER FEW ARE SHORT TERM
4. FREQUENCY OF TRANSACTIONS ARE 150 TRANSACTION IN A YEAR
QUERY???
WHTHER LONG TERAM CAPITAL GAIN BE DENIED ON THE GROUND THAT MARGIN FUNDING USED AND TRAT IT AS A BUSINESS?
Nikhil Kaushik
(Expert)
21 October 2014
not necessarily. you shall have to establish that you are holding investment as capital assets. If you fail to do so, AO has to right to consider the transactions as business transaction by following facts over form. Nevertheless, intraday transactions are taxed as speculative business income
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