Capital gain or business income or speculative income

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CA Rushikesh Kolhe (Querist)
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06 August 2013 I want to start a pvt ltd under which I will do activities only as share trading either intraday or delivery, derivatives trading. I can also specify the same as main activity in MOA AOA Of company.
So whether the income generated from the above activities will be treated as business income? Or capital gain or speculative income? And whether I can claim expenses such as salary office rent conveyance etc against such income?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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06 August 2013 1. Trading Activity and Speculative activities will be covered under Business Income. Expenses can be claimed.
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2. Shares kept in separate demat account(s) may be termed as for investment on which capital gains income can be shown.
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CA Rushikesh Kolhe

CA Rushikesh Kolhe (Querist)
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07 August 2013 Thanks Mr Paras for reply
But i read some where( i dont remember where) that derivatives trading will be considered as speculative and no matter what type of business you are doing, it will be considered as speculative income only. is it so?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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11 August 2013 Please refer Section 43(5)(d) to clear the doubt. Derivatives transaction taking place in recognised exchanges are not speculative transactions.
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CA Rushikesh Kolhe

CA Rushikesh Kolhe (Expert)
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13 August 2013 Thanks CA Paras.
I will go through the section.

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