19 July 2010
The day trading involves transactions in shares purchase and sale without taking delivery. Under the Income tax Act, the transaction without delivery is called “Speculation ” . How does it effect your total income?While the speculation income of Day Trading is added as Normal Income and taxed as per tax slab.However,the Speculation loss in day trading will only be adjusted with other speculation income
19 July 2010
As per proviso d of section 43(5) following transaction is not be deemed to be a speculative transaction.
an eligible transaction in respect of trading in derivatives referred to in clause 67[(ac)] of section 2 68 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) carried out in a recognised stock exchange;]
shall not be deemed to be a speculative transaction.
69[Explanation.—For the purposes of this clause, the expressions— (i) “eligible transaction” means any transaction,—
(A) carried out electronically on screen-based systems through a stock broker or sub-broker or such other intermediary registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) and the rules, regulations or bye-laws made or directions issued under those Acts or by banks or mutual funds on a recognised stock exchange; and
(B) which is supported by a time stamped contract note issued by such stock broker or sub-broker or such other intermediary to every client indicating in the contract note the unique client identity number allotted under any Act referred to in sub-clause (A) and permanent account number allotted under this Act
now whether intra day tranaction in future & option is eligible transaction as per proviso d of section 43(5) or not . Please feedback on it.