security

This query is : Resolved

Share Report Follow Query Ask a Query

ankita gupta

ankita gupta (Querist)
Follow

02 December 2016 can anyone tell me meaning of security as per income tax act 1961

Sandeep Dharar

Sandeep Dharar (Expert)
Follow

02 December 2016 Security may be referred to investment in shares etc. If u r asking regarding IT account security then please elaborate.

ankita gupta

ankita gupta (Querist)
Follow

02 December 2016 other than debenture, share. there is any other security which is cover under income tax act 1961???

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
Follow

23 July 2025 Under the Income Tax Act, 1961, the term "security" is not exhaustively defined in a single section. However, its meaning is generally aligned with the definition provided in the Securities Contracts (Regulation) Act, 1956 (SCRA), as referenced in various places in the Income Tax Act.

✅ Definition of "Securities" (as per SCRA, 1956 – Section 2(h))
"Securities" include:

Shares, scrips, stocks, bonds, debentures, debenture stock (whether issued by a company or a body corporate)

Government securities

Derivatives (like options, futures)

Units or any other instrument issued by collective investment schemes / mutual funds

Security receipts under Securitisation Act

Units of REITs (Real Estate Investment Trusts), InvITs, etc.

Any other instruments as notified

✅ Relevance under the Income Tax Act, 1961
In different contexts like:

Capital Gains (Section 2(14), 2(42A), etc.)

Income from Other Sources

Section 94 (Bonus Stripping, Dividend Stripping)

Section 10(38) (now withdrawn) – Exemption for long-term capital gains on sale of listed securities

Securities Transaction Tax (STT) – applicability when transacting in listed securities

…the word “securities” takes the meaning as per SCRA.

✅ Examples of "Securities" under Income Tax Act (broader meaning):
Equity shares

Preference shares

Debentures / Bonds

Government securities (e.g., T-bills)

Derivatives (Futures & Options)

Mutual fund units

REITs / InvITs

Securitised instruments

❌ Not treated as “Securities”:
Physical gold or gold ETF (not unless notified)

Real estate property

Bank fixed deposits

📌 Summary:
So yes, besides shares and debentures, many other instruments are treated as "securities" under the Income Tax Act by virtue of their inclusion in the SCRA definition — such as bonds, derivatives, government securities, mutual fund units, etc.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now