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Share transaction - speculative or not.

Tax queries 331 views 1 replies

CA Saswata Chakraborty

29 Points Joined September 2011

I have demat account and trading in shares -

I have indulged in both 'intraday transaction' and 'delivery based trading'. At the year end I have closing stock of sahres held.

The volume of intraday transaction was comparatively lower than delivery based trading.

My queiry is

whether in this situation the taxman will treat it as 'speculative transaction' u/s 43(5) or normal business.
if they consider it as speculative then can I put forth any arguements, as I have incurred loss and want to set it off against other taxaxble income.

Warm regards

Replies (1)

Prateek Agarwal

Sr. Executive - Finance & Accounts

1732 Points Joined February 2011

Hi Saswata,

Intraday transactions are treated as Speculative Transactions whereas delivery based are treated as business income. In case of speculation business you can set-off the losses from speculative income only. Bugt business losses can be set-off against both business as well as speculative income as well.

Regards