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Taxation on income from shares

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If i purchase and sale shares by forming a Private ltd. co. or a firm, whether my gain from it will be taxable under business income or capital gains?

Replies (3)
where any co.,or firm engaged in the trading of shares then income arising from such trading activities is treated as business income and taxable u/h PGBP

Thanks Sir. One more thing i want to ask, that if shares are sold after one year will it not arise capital gain on it?

Normally, trading of shares  is to earn the profits by purchase and sale of shares and hence the trading company doesn't hold the shares for longer period.If you have such two portfolio i.e one for frequently purchase and sales of shares ,and second is to hold the shares for more than 12 months ,then you may bifurcate the income arising out of trading and out of investment.

Accordingly, if you hold the share for more than 12 months then that would attract the income tax under head Capital gain. 


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