Taxation of trading in shares

This query is : Resolved

CA Mohit kumar jain (Querist)
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01 September 2012 Dear Colleagues,

one of My friend is MBA, providing consultancy services, his receipt is around 40Lacs, he also doing trading in shares total transaction is around 3.86 crores, F&O transaction around 14 crores.

I am doing treatment as below,

1. His consultancy receipt is taxable as profession income.
2. F&O income taxable as speculation business income.
3. Trading in shares which is delivery based as Capital gain income.

Further I want to know the treatment of stock of F&O based securities on 31.03.2012.

Please give me your valuable suggestion.

Thanks & regards,
CA Mohit Kumar Jain.
+9251336274,9461336274

Soumitra Basu

Soumitra Basu (Expert)
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02 September 2012 If entire share transaction should be treated as business transaction considering the volume and frequency.

Praveen Kumar Rathi

Praveen Kumar Rathi (Expert)
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03 September 2012 1. treatment is right.
2. After recognition of Stock Exchanges there is no name of speculation in the Stock Market. so the income will be shown as normal business income.
3. Trading in shares may be considered as Business because it will be decided on the nature, volume and frequency of transaction.