How to make journal entry for forfeiture of shares.

if held as business investment than it would be treated as loss       

wht kind of loss shall i treat it..

i'm investing in shares everyday its my business

shall i take it as short term capital loss and  carry forward  under short term capital gain loss and set off against future profits or present profits

loss is of 2 lacs

as you r a trader of shares hence it should be treated as trading loss         

it depends on the nature of activity of your organisation. if your main activity is trading then it is a business loss and should be charged to profit & loss account, if not, then it is a capital loss and that part of investment which is forfeited, should be set off against investment.

Friend Think a normal employee has invested in some co. and his money was forfeited wht will b ur reply in tht case

I think there shall also be a provision under the ACT specially for this.. even though this doesnt happen much.

just like investments value will be nil.

it will be short term capital loss if the shares held for less than 12 months otherwise long term remember if long term capital gain accrue on the shares which are listed on recognised stock exchange ( STT charged ) then it cannot cliam as loss.