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Derivative trading


Hiten (CA)     07 December 2015

Hiten
CA 
 7 likes  275 points

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whether trading in derivatives is always consider under PGBP?? ignoring fact that there are only 2-3 transaction of below 50,000 during py

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Nikhil Kaushik (Co-founder @ Graviky)     07 December 2015

Nikhil Kaushik
Co-founder @ Graviky 
 3740 likes  83978 points

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well for a very small number of transactions, you may account for the same in capital gains/other income. 

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Piyush Singhal (CA STUDENT)     09 December 2015

Piyush Singhal
CA STUDENT 
 22 points

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Derivatives will always be considered as PGBP Income if it is carried out on recognised stock Exchange

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Nikhil Kaushik (Co-founder @ Graviky)     09 December 2015

Nikhil Kaushik
Co-founder @ Graviky 
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Dear Piyush,

 

There is no such condition.  Whether it is a business or not will always be subject to the facts of each case.   Further, even if I take your statement as half correct, the other half will still be wrong as even if you consider derivative trades as business, it is immaterial whether it is traded on a recognized stock exchange or not.

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Nikhil Kaushik (Co-founder @ Graviky)     09 December 2015

Nikhil Kaushik
Co-founder @ Graviky 
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help yourself with this https://www.livemint.com/Opinion/xd9723x6oEXvV0X1eu5MOO/Derivatives-are-complex-and-so-is-their-tax-treatment.H T M L

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Piyush Singhal (CA STUDENT)     10 December 2015

Piyush Singhal
CA STUDENT 
 22 points

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As per the defination of speculative transaction under Income Tax Act,1961, a transaction in derivatives will not de deemed as speculative transaction if it is carried out at recognised stock exchange. 

If the person dealing in such transaction is a businessman then it will be taxable under the head PGBP otherwise income under the head Other Sources


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