Futures & Options
This query is : Resolved
30 January 2009
Sir,
Please let me know whether profit/loss arising out of Futures and Options is Capital or Speculative?
Please let me know whether profit/loss arising out of Futures and Options is Capital or Speculative?
30 January 2009
Speculative
30 January 2009
As per section 43(5)(d)of the Income Tax act,1961, with effect from 01/04/2006 transactions of trading in derivatives is considered as non-speculative.
03 April 2009
Income derived from dealing in futures and options will be treated as income under the head “Profits and Gains of Business or Profession”.
Such income would be treated as speculative income, since there would be no actual delivery of the shares and further since Section 43(5) provides that where there is no periodic or ultimate delivery, the transaction would be treated as speculative.
Such income would be treated as speculative income, since there would be no actual delivery of the shares and further since Section 43(5) provides that where there is no periodic or ultimate delivery, the transaction would be treated as speculative.
03 April 2009
Section 43(5), however, provides that such transactions will not be treated as speculative, if the transaction is routed through a recognised stock exchange, is done through a registered broker or sub-broker, where the transaction has a contract note, which specifies the unique code number of such broker or sub-broker, as also your permanent account number and further where the transaction is done on a screen-based trading.
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