Income from dealing in securities

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Jitesh Chowdhury (Querist)

30 September 2008 Under which head would, the income earned by way of intraday transactions entered on a recognised bourse, be charged and what about transactions entered on the F&O segment of the market?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

30 September 2008 The income from intraday trading may be booked as 'Jobbing Income' or 'Profit/Loss from Settlement of Contracts' and from F&O it may be booked as 'Income from Derivatives'.

Jobbing Income is speculative in nature and will fall under the head of 'profit and Gains from Business and Profession'. However, the Income from F&O Segment is non speculative in view of Section 43(5) and is taxable under the head of Business Income.

Jitender

Jitender (Expert)

30 September 2008 & separate books are required to be maintained.

Jitesh Chowdhury

Jitesh Chowdhury (Querist)

30 September 2008 And would short term & long term loss be accounted under the head Income from Capital Gains, irrespective of the nature of intention viz, trading or investing?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

01 October 2008 The gain or loss on investments may be booked as gain or loss on sale of investments and the same may be taxed as Capital Gains. But in case the volume of transactions suggests that it is an adventure in the nature of trade and not as investment then AO may hold these as the business activity and proceed accordingly.

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