Derivatives

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Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2015 sir, we are a manufacturing co.and we took a loan of 3.02 million euro for capital expenditureand, to cover the loss due to exchange fluctuation we hegde in foreign currency and also did dealing in deivatives, whether such hedging and dealing in shares and derivatives covers under speculative business or non speculative business and under which head in income tax act, 1961. plz guide me.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 April 2015 non-delivery trades in shares will count as speculative trading. for derivatives, if they are traded on stock exchanges, it wont be considered as speculative transaction.

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2015 if they are speculative, under which head it is taxable whether capital gain or PGBP.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 April 2015 business income only....but as speculative business...capital gains are never considered speculative/nonspeculative!

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2015 Thanks sir for resolving my query, if there is any case law in support of your answer plz refer me. Actually this case is in scrtuiny, so i need supporting in our opinion.

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