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Can i a/c share trading as business income

harishraj (manager) (74 Points)

15 March 2012

i trade shares and earn profit above 5lakhs per annum can i a/c this as business income if so what all can i deduct or if i a/c it as income from other source and pay capital gains as 15% can i deduct any expense ,,,,which is best for me please help me.........

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Sonam Bidasaria (CA) (770 Points)
Replied 15 March 2012

It is better to show the income from trading in shares as business income.......because you can claim the deductio of general administrative expenses, depreciation etc which is not possible in case of treating the same as Capital gain.

Moreover, it has to be kept in mind, such profit has to be shown as business income consistently over a period of time until and unless you have strong logic to treat it otherwise.

For eg at a same time you can trade in 40 odd number of shares but few shares can be held as capital asset provded you will hold them for a considerable time.