taxation of share profit

A limited copany named ABC Exporters Ltd. presently not carring export activity invest in mutual fund and stocks.
It invest in shares on delivery basis and also on future basis.
The profit / loss of mutual fund are being treated and assessed under capital gain.

Pl guide me in view of section 43 (5) and explanation to section 73 whether the profit / loss on trading of shares on delivery basis would be either business income or speculative income or capital gain. You can refer to some other section also if any.

Also guide what would be situation if profit / loss is on trading of shares on future basis

Replies (5)

"Delivery basis" means - Short Selling ????

It should be treated as Business Income.

thanks

in case of business income whether specutative or normal income ? Pl guide. can you provide you cell no ?

Profit or Loss from shares on delivery basis can be treated as Capital Gain, but if number of transactions during the year is high then better to treat the same as business income.

Intraday income from secutiry transaction are treated as speculative income in either case.

If you consider share income as business income then you can claim STT as expenditure, in other case STT would not be availbel for set off.

You can not take advantage of Long term capital gain (NIL) if you consider such income as business income.

 

Dear Mehul

your views are correct for individual but for company i fear that situation can be different pl reply again my original querry is A limited copany named ABC Exporters Ltd. presently not carring export activity invest in mutual fund and stocks.
It invest in shares on delivery basis and also on future basis.
The profit / loss of mutual fund are being treated and assessed under capital gain.

Pl guide me in view of section 43 (5) and explanation to section 73 whether the profit / loss on trading of shares on delivery basis would be either business income or speculative income or capital gain. You can refer to some other section also if any.

Also guide what would be situation if profit / loss is on trading of shares on future basis

 

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