speculative business

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Hii.. transaction of share market done by pool account is considered as speculative business or not?? n if it considered as speculative business n total turnover of sale & purchase of share by pool account exeeds 40 lacks then whether audit is applicable or not???

Replies (5)

Even if the shares are lying the pool account of the broker still normal provisions of Income Tax Act will apply as if the shares are held in demat account. So special treatment in case of shares held in pool account of the broker. This is a very normal feature for dealing in shares.

Dear Aditya sir.........

Can you please elaborate???? Please......

If the transactions carried are intra day trasactions then it will be speculative business for all purposes.

If the shares are held in stock in trade then all delivery transactions will be considered as non speculative business in case of assessees other than companies.

If the shares are held in stock in trade then all delivery transactions will be considered as speculative business in case of assessees are companies as per explanation to Section 73. If it falls under the exception to the explanation then non speculative business.

If shares are held as investment then profit / loss on sale of shares will be taken as income from capital gains.

And in case of shares held in stock in trade and if turnover exceeds Rs. 40 lakhs (for this F. Y. Rs. 60 lakhs) tax audit applicable.

thanks man...

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