18 December 2007
the company is having the main source of income by its ordinary business which is mentioned in its MOA/AOA and having also trading income of shares in its books of accounts. What will be the tax treatment of income from shares in the computation of income ? Whether it is treated as income from normal business income or speculation business income?
18 December 2007
As per Explanation to Sec.73 loss arising on trading in shares by a company shall be deemed to be a speculation loss.However the said section does not talks about profit. But since the loss is deemed as speculation loss the profit thereof shall also be considered to be speculative in nature.
The income / loss from trading in shares & securities shall be taxed under the head Capital Gains. In trading, delivery of securities is a must. In speculation business there is no delivery of goods. The same has been abolished in business of shares and securities.
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