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Short term capital gain of equity shares

P. Shah (Accountant) (207 Points)

24 January 2021

Please can anyone assist for this.
If I have short term capital gain in equity shares and I am also incurring interest expenses towards amount borrowed for investment in equity
can I claim the interest expenses deduction in short term capital gain

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19 Replies

Kapadia Pravin (17249 Points)
Replied 24 January 2021

Yes. You can claim

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 24 January 2021

Yes you can

P. Shah (Accountant) (207 Points)
Replied 24 January 2021

Thanks to both of you

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 24 January 2021

Ur welcome

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 24 January 2021

If you are declaring income from equity as speculation business Income then only you can claim such expenses

3 Like

P. Shah (Accountant) (207 Points)
Replied 24 January 2021

Ok noted
But I am having salary income and short term capital gain from equity

1 Like

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 24 January 2021

So you can't claim such expensesn

1 Like

P. Shah (Accountant) (207 Points)
Replied 24 January 2021

Ok noted Thanks

2 Like

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 24 January 2021

Welcome........My Pleasure...

2 Like

Kapadia Pravin (17249 Points)
Replied 24 January 2021

You can very well claim interest expenses from short term capital gain. Not necessarily speculation income.

Ashok J (CA Final) (880 Points)
Replied 30 January 2021

@ Kapadia Pravin - Which section says that you can claim Interest expense from STCG?

@ CA Rashmi Gandhi - How can sale of equity shares be considered speculation biz? It always involves delivery. Speculation income arises only when there is no delivery...

Ashok J (CA Final) (880 Points)
Replied 30 January 2021

@ Kapadia Pravin - Which section says that you can claim Interest expense from STCG?

@ CA Rashmi Gandhi - How can sale of equity shares be considered speculation biz? It always involves delivery. Speculation income arises only when there is no delivery...

P. Shah (Accountant) (207 Points)
Replied 30 January 2021

Finally what is the conclusion please. Everyone has expressed their different views.
I am really confused now.

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 30 January 2021

Speculative transaction is a transaction of purchase or sale of a commodity including stocks and shares settled otherwise than by actual delivery or transfer of the commodity or scrip (Section 43(5) of the Income-tax Act)

Example: In the case of intra-day trading in shares, there is no actual delivery as the shares enter and exit from the trading account on the same date and it does not enter the DEMAT account at all. Intra-day trading is the trading of shares within the same day. Generally, the delivery is not taken in case of intra-day trading. Thus, they are called speculative transactions.

Firstly check the nature of your transaction then only decide what to do

1 Like