tax query

Tax queries 889 views 8 replies

Whether income earned through portfolio management scheme is assessable under the head capital gain or under the head income from business and profession. Kindly resolve the query.

Replies (8)

In my view, it is a business income.

If income is earned through rendering of consultancy services in respect of Portfolio Management then it shall be taxable under the business and profession head.However income from securities will individually depend on the nature of the income ie. Revenue or Capital and the provisions of the income tax act that relate to that security which may be shares or debentures or units of a mutual fund etc.

It is treated as business income

It should be treated as business income

THE QUANTUM OF TRANSACTION WILL BE DECIDING FACTOR FOR TOPIC. THERE IS EVEN CIRCULAR HAS NOT CLARIFIED THE QUANTUM.

for the Asst. year 2006-07 there is a Share capital inflow of 40 Lacs and Share Application money of 68 lacs (Mojor inflow is in the form of Cash). is it necessary to take confirmation of account. will it be disallowed if confirmations not provided.

IT WILL BE A BUSINESS INCOME AND NOT A CAPITAL GAIN. BECAUSE PORTFOLIO MANAGER IS PROVIDING A PROFESSIONAL SERVICE WHICH WILL BE TREATED UNDER THE HEAD ' PROFIT AND GAINS FROM BUSINESS AND PROFESSION'..

As per the definition of Business

1. There Must be Adventure

2. Risk

3. Continious Activity

In a portfolio Management, a person fulfiles all conditions so the income arises from the same should be taxed in PGBP


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