How profit earned on short selling of shares is taxed. On purchase of shares to cover the transactions, will it be treated as STCG or normal business profit or speculation profit?
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Profit on short selling of shares
Replies (6)
Check frequency of transactions. If frequent, go for speculative business income.
Not very frequent...can it be treated as STCG / STCL..
Being short sell, advisable to declare under IFOS.
It's speculative business income.It doesn't depend on frequency.It is a transaction wherein delivery of shares was not taken.Thus by definition it's speculative business income.
As it's a transaction of short selling, it will be settled not by actual delivery of shares. So, it's a speculative transaction and therefore, should be shown as speculative business income.
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