Set Off of Loss
This query is : Resolved
Sunil Kr. Sanganeria
(Querist)
10 January 2011
A Company has income under the head Capital Gain. The Company incurs loss in Trading(Sauda squared up same day) in Commodity Exchange(NCDEX). can Loss in Commodity be set off against Capital gain.
Im ny opinion, loss incurred at MCX is allowed only to be set off against Capital gain.
Please clarify.
Im ny opinion, loss incurred at MCX is allowed only to be set off against Capital gain.
Please clarify.
Aditya Maheshwari
(Expert)
10 January 2011
Loss from commodities trading from either MCX & NCDEX is speculative business income income and hence cannot be set off against capital gains.
MCX Stock Exchange Ltd. has been recognised under section 43(5)(d) which means that the trade in derivatives through this exchange will now be regarded as Business transaction which deals in currency derivatives and Multi Commodity Exchange of India Limited trades in commodities and not MCX Stock Exchange Ltd. So commodities trading in MCX still speculative only.
MCX Stock Exchange Ltd. has been recognised under section 43(5)(d) which means that the trade in derivatives through this exchange will now be regarded as Business transaction which deals in currency derivatives and Multi Commodity Exchange of India Limited trades in commodities and not MCX Stock Exchange Ltd. So commodities trading in MCX still speculative only.
Sunil Kr. Sanganeria
(Querist)
10 January 2011
Thanks for replying immediately.
But it is still not cleat to me. Please let me know if a company incurs loss on any Commodity Exchange in commodity trading, can that loss be adjusted with Capital Gain
But it is still not cleat to me. Please let me know if a company incurs loss on any Commodity Exchange in commodity trading, can that loss be adjusted with Capital Gain
Aditya Maheshwari
(Expert)
10 January 2011
no it cannot.
12 January 2011
no .. if the nature of business or transaction is speculative the the losses from that business or transaction can not be set off...
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