Taxability of options

Tax queries 146 views 5 replies
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none
25 Points Joined January 2012

Hello,

I have a query relating to the taxability of Options.

I am resident and ordinarily resident in India and will continue to be so.

I have earned approximately 2400 as derivative income in the current year.

12000 being the Sales Value of my option and 9600 being the cost price of my option. There is a 7 day gap between purchase and sale of the option.

I am a salaried individual and my age is 25.

My query being the amount of 2400 shall be taxed under which head?

I will do a maximum of 5 such transactions this year.

I have done multiple google searches and havent found a suitable solution. 

Some of the websites state that it should be taxed as business income while some state that it can be taxed as Capital Gains.

Kindly provide some clarity in this matter. I basically want to know whether i can classify the same under capital gain. 

Thanks

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On 28 August 2017 at 19:29 Report
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SEO Sai Gr. Hosp.
210518 Points Joined July 2016

" Some of the websites state that it should be taxed as business income while some state that it can be taxed as Capital Gains.

Kindly provide some clarity in this matter. I basically want to know whether i can classify the same under capital gain. "

Great that you are loaded with the knowledge........ and let me ascertain that both aspects are correct......

Rather not to confuse you more......... if your transactions are just 5 per year... you can offer to assess it as Capital gain.

But practically, when the transactions are numerous with huge/sizable turnover...... it is assessed under Business income.......

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On 28 August 2017 at 20:54
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"Do the Right Thing...!!!"
128147 Points Joined January 2015
Very well explained Dear Mr Dhirajlal Rambhia...
One More.,
How to the law define five/less...? What is the exact limit consider as CG...?
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On 28 August 2017 at 21:25
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SEO Sai Gr. Hosp.
210518 Points Joined July 2016

Not defined clearly....... depends upon the intention/trend of investor......... but mainly frequency counts........ rarely/occasionally or almost daily......... also which is main source of income....... for salaries persons it is usually CG.

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On 29 August 2017 at 07:43
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"Do the Right Thing...!!!"
128147 Points Joined January 2015
Good Morning Sir.,

Thank You for the Reply Sir
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On 29 August 2017 at 07:52
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SEO Sai Gr. Hosp.
210518 Points Joined July 2016

Very Good Day........Dear..........

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On 29 August 2017 at 07:57


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