Hi All,
Can anyone please explain me on the taxability of DEMAT transactions, Loss booking & Carry Forward of the same.
Also, If the above is done through my account, what will be the consequences?
If the above is done through my mother's account what will be the consequences?
If I am an NRI & I am doing through my mother's account, what will be the consequences?
on demat a/c there are two types of transactions .
delivery based and non delivery based
non delivery based transaction(intra day) are treated as speculative transaction and taxed under the head pgbp.
delivery based transaction are non speculative. the income from purchase and sale of this transaction can be treated under the head capital gain or under the head pgbp.
to identify the cost of shares sold ...we use the fifo method. in this method the cost of shares of shares sold will be the cost for which the same no. of shares for firs bought
for eg. shares bought were 1/4/2000 500 rpl @ 120per share
10/5/2008 1000 rpl @ 115per share
13/5/2009 500 rpl @ 125 per share
now suppose we sale shares 750 rpl shares for rs150 on 2.4.2009
then cost of shares sold(coa) =120*500 + 115*250=rs 88750
pgbp(if income is shown as business income)=750*150-88750=23750
capital gain
long term gain(on 500 shares)sale consideration 75000
less (indexed cost of aq) 60000(582/406)86010
loss rs 11010
stcg on 250 shares 250*150-250*115=8750
determining period of holding and nature of capital gain
if shares are held for more than 12 months then shares are considered long term.
otherwiseshort term
loss considered for taxation purpose
only realised loss are considered for the purpose of set off and carry fwd(chapter vi)
loss under speculation business can only be set off speculation gains in other speculative business
losses under ltcg can only be set off wtih ltcg
losses undr stcg can only be set off with ltcg and stcg
losses under head pgbp(non speculative) can be set off with any other head except salary
also if u operate thru mother's act ...i think it wont be a problem...as clubbing provisions dont apply to mother son relationship....
make sure u make a gift deed if u want to divert the income to ur mother's a/c.
i think there should not be any legal complications
CAclubindia
