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Loss on speculation of shares

pinky prajapati (practicing CA) (62 Points)

06 April 2011

this is pinky prajapati from ahmedabad.

my qyery is :

An individual generates loss from speculation of shares. whether this loss can be considered as normal business loss and can be set off against profit from other business or profession?

if there is any circular or notification in this regard, please refer.

Thank u.

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7 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 06 April 2011

Speculation loss only can be set off with speculation income..

MD (AAA) (117 Points)
Replied 06 April 2011

As per section 73 loss from a speculative business can be set off only against income from a speculative business (it may be the same or some other speculative business).

Vikas Marele (CA in Service) (1144 Points)
Replied 06 April 2011

Pinky what do u mean by speculation of shares.........?

Ravindra Manek (Chartered Accountant) (74 Points)
Replied 06 April 2011

What do you mean by Speculation of Shares? Whether transactions entered into are in the nature of intraday trading or future and option?

If it is intraday trading - Speculative Business - Loss can be set off against Speculative Income only.

If it is future and option - Does not amount ot speculative transaction (Ref. Section 43(5) of the Act) - Normal Business Income. Loss from it can be set off against normal business income as well as speculative income.

M. N. JHA (CA) (8316 Points)
Replied 07 April 2011

Originally posted by : Ravindra Manek
	What do you mean by Speculation of Shares? Whether transactions entered into are in the nature of intraday trading or future and option? If it is intraday trading - Speculative Business - Loss can be set off against Speculative Income only. If it is future and option - Does not amount ot speculative transaction (Ref. Section 43(5) of the Act) - Normal Business Income. Loss from it can be set off against normal business income as well as speculative income.