Futures & Options

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Krishna Murthy (Querist)
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30 January 2009 Sir,
Please let me know whether profit/loss arising out of Futures and Options is Capital or Speculative?

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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30 January 2009 Speculative

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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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.

Taranjit Singh

Taranjit Singh (Expert)
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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.

Taranjit Singh

Taranjit Singh (Expert)
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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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