Securities Transaction Tax - 1

As per Finance bill, 2008; there was change in the treatment of securities transaction tax (STT)   for investors whose income from share trading had been taxed under the head of “business income”. After the amendment, the entire STT payment been treated as expenditure against the income from trading of shares.

However, for investors who claim their profit as capital gains, there is no such provision. The STT paid isn’t treated as an expenditure and there is no tax rebate.

The STT paid for transactions claimed under head CG, cannot be claimed business expense, as it is not incurred to derive business income.

Ok, Thank you very much.

But if an individual claims income from share trading activities under both heads capital gains and business income/ speculative income (Intraday) then can he claim STT paid on Intraday transactions as business expense.

Yes, but only the STT paid over intraday transactions, can be be claimed as business expense.