02 August 2010
There is a Section 43(5) which defines the word Speculative Business under Income Tax Act, 1961. To know whether sale and purchase of shares shall be considered under business income or Capital Gain will depend upon the intention for which shares were purchased. If shares were purchased for investment purpose and then sold. In such a case it shall be considered under Capital Gain. However, if shares are purchased to earn profit by using fluctuations in the prices then they shall be considered under business income.