Short term capital gain u/s 111a

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Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2013 Mr. X (Individual assessee) earning income from sale and purchase of shares and securities on regularly basis i.e intra day transaction or delivery transaction through registered broker. Out of such shares Mr. X earn dividend also.

Now my querry is that under which head such income is chargable and what is the reason of charging such income under that head only and in which section it is mentioned please clarify me.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

28 June 2013 Income is taxable as business income as Mr.X is trading in shares. Head of Income :PGBP
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Intraday Transaction income is treated as Speculative Business Income and assessed under the head PGBP.
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Dividend Income is tax free in normal cases
and taxable under the head Income from Other Sources.
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In case Mr. X is not frequently trading in shares then income can be shown under the head Capital Gains.
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Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2013 trading between how many days were come under capital gain.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

28 June 2013 There is no fix criteria however in the light of case laws and CBDT circulars a long discussion is possible.
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You may visit the following link- (and many others are also available)-

https://www.moneycontrol.com/master_your_money/stocks_news_consumption.php?autono=698701
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and read under the headings :
1. Purchase and Sale of Shares within a short period would be Capital Gain:
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2. Profit on Sale of Shares treated as Capital Gain as Shares not treated as Stock in trade:
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The best judge is the assessee and his honest consultant.
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Querist : Anonymous

Querist : Anonymous (Querist)

28 June 2013 thanxs sir but as per my knowledge at the last it will depend upon assessee intention that what he will treat shares. wheather he can treat shares as stock in trade for business income or he may treat it as investment for capital gain.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

28 June 2013 Right... I have included you also with the assessee to adjudge.
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