Shares & securities
This query is : Resolved
23 December 2013
How to decide whether the shares & securities is held as stock in trade or Investment?
CA PARAS BAFNA
(Expert)
23 December 2013
If it is held then try to know the reason why it is/was being held and by whom it was being held.
.
The holder, if -is a trader in shares then
the shares can be termed as stock in trade.
.
If the person seldom sells and rarely purchases shares, he is an investor. Such shares can be said to be held as investment.
.
A single person can be a trader and investor both.
.
If he amintains separate demat accounts for trading and investment purposes, ther is no issue, but if he maintains a common account, then according to his nature of activity, you can treat the shares as such.
.
The holder, if -is a trader in shares then
the shares can be termed as stock in trade.
.
If the person seldom sells and rarely purchases shares, he is an investor. Such shares can be said to be held as investment.
.
A single person can be a trader and investor both.
.
If he amintains separate demat accounts for trading and investment purposes, ther is no issue, but if he maintains a common account, then according to his nature of activity, you can treat the shares as such.
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