income tax on trading in shares/stocks
This query is : Resolved
27 March 2008
what is the procedure for distinguishing Share s trading income to be taxed as business income and Capital gains Income?
27 March 2008
Here intention of the assesses has to look into , if he is acquiring the share for trading purpose then it will be taxable under business head, if they are acquiring with the intention of holding for certain period or there intention is not as per above then it will be taxable under the head of capital gain.
27 March 2008
In addition to intention of the assessee,department can look into the nature,frequency of transactions and accordingly decide the nature of income.
27 March 2008
VOLUME OF TRANSACTIONS, FREQUENCY OF TRANSACTIONS, AND THE REAL MOTIVE OR OBJECTIVE OF THE INVESTMENT WHETHER IT IS TRADING PURPOSE OR INVESTMENT PURPOSE ARE ALL LOOKED INTO TO DECIDE THE NATURE OF INCOME TO BE TREATED AS BUSINESS INCOME OR CAPITAL GAIN .
R.V.RAO
R.V.RAO
27 March 2008
The following factors would be relevant collectively not in isolation-
1 Period of holding
2 Frequency
3 Motive Of Purchase
4 Source of acquisition - whether out of own capital or out of borrowed money
5 resources employed
6 relation with other activities
1 Period of holding
2 Frequency
3 Motive Of Purchase
4 Source of acquisition - whether out of own capital or out of borrowed money
5 resources employed
6 relation with other activities
28 March 2008
ALL THE ANSWERS ARE CORRECT
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- RATE AND HSN CODE
- Taxability of Partnership firm for FY 2025-26
- Portuguese Civil Code IT Return
- TDS AND ITR ISSUE
- EMI ISSUE IN HOUSING LOAN OLD REGIME
- LIC maturity claim whether taxable
- HOUSING LOAN ISSUE
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
- NRI ITR2 account in 2025-26.
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
