Stock lending & borrowing

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chetan (Querist)
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08 January 2012 Dear all,

What shall be the tax treatment in the hands of lender and borrower in case of transaction of Stock Lending & borrowing scheme ?

What shall be tax treatment when lender and borrower have followed accounting policy as to show transaction as investment and business ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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08 January 2012 In case of stock borrowing, the benefits received in connection with it, will be treated as income by the Lender.
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Borrower can claim the expenses in case he is a trader in such securities.
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By the virtue of Section 47(xv) such transactions are not treated as transfer.
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The borrower will recognise revenue at the time of purchase of such securites.
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