tax on derivatives gains and losses

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 July 2010 Hi...have a confusing query..

An individual has done derivatives trading (not as a dealer trading but investor kind of trading)in FY 2009-10. What is the tax implication if:

1)he has received a gain;
2)he has incurred a loss

Aditya Maheshwari

Aditya Maheshwari (Expert)
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30 July 2010 Derivatves trading income is non speculation business income.

Querist : Anonymous

Querist : Anonymous (Querist)

30 July 2010 Hi Aditya...I'll appreciate if you answer queries with more detail and information.

I heard that derivatives trading (where STT) has been paid is non speculative business.
Whereas, derivatives trading in commodities is considered speculative business.

What would be the tax implication on the above and which ITR form to be filed in each case?

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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30 July 2010 Yes derivatives trading in shares & currency is non speculative business whereas, derivatives trading in commodities is considered speculative business.

Since both are business income ITR - 4 to be used as it is the ITR to be used for that purpose.