TAX TREATMENT OF FUTURES AND OPTIONS

One of my client who is a salaried empolyee in MNC  also dealing in futures and options through NSE and BSE brokers. For the Asst year 2007-08 profits earned in futures and options  offered to tax as short term capital gains and paid the tax. A note also given in the computation sheet along with the return that his main activity is employment  and not trading in future and options and hence considered the gains from future and options as Short term gains. Now the assessing officer wants to treat the profit from the above activity under business income. Can any one suggest me a reference case to defend the  method adopted by my client is correct.  

CA viswanadh

Replies (1)

Dear Sir,

It can be treated as Capital Gains - Pls refer this

https://sanjaykadel.com/a-F&O.pdf

https://www.capitalmarket.com/cmedit/story11-37.asp?SNo=376982

Now as far as reference to any case law goes -

First, I could not get any case law relevant to the present case.

Secondly, I believe whether any transaction should be regarded as "Business" or "Capital Gain" is a question of fact & should be decided on the facts of each case & hence reference to any case law will not help in this case. 

The broad principles to consider in treating it as Capital gains are there in the first link.

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