Derivative transaction

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This query is : Resolved

CA Kanchan (Querist)

15 September 2012 Derivative Transaction in commodity like Zinc, Oxide, etc. is taxable as speculative Income or Non speculative Business Income. The transaction is Carried out at an Recognized Stock exchange MCX.

Amol S Joglekar

Amol S Joglekar (Expert)

15 September 2012 A debate is still going on on this issue. IT should be treated as SPECULATIVE as the delivery is not taken. (Although the under lying is the actual commodity )

CA Lokesh Pokharna

CA Lokesh Pokharna (Expert)

15 September 2012 There is a specific exemption for security derivatives, whereby such derivatives are not to be treated as speculative transaction. However, this exemption only applies to derivatives traded on notified stock exchanges (Bombay Stock exchange, National Stock Exchange, and United Stock Exchange) through stock brokers (i.e. security derivatives) and does not apply to commodity derivatives which are traded on commodity exchanges. Therefore, clearly commodity derivatives transactions squared up without delivery would amount to speculative transactions.

CA Kanchan

CA Kanchan (Querist)

15 September 2012 As per Notifiaction No. 46/2009 dated 22.05.2009 includes contract carried out at MCX is recognised for 43(5)(d) and MCX is an exchange for commodity trading.

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