C.G. vs Business Income

This query is : Resolved

Vishal Gill (Querist)
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18 July 2007
what are the grounds of diffrence between a person making investment as a shareholder or otherwise (as a businessman).
How can we prove that we are making investment in shares as a shareholder so that profit on sale of shares is chargeable @10% instead of slab rates.

Aditya Nemani

Aditya Nemani (Expert)
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24 July 2007 The basis for the same would be the treatment metted to the shares purchase / sale i.e. whether the same is being treated as investment or as stock.
Further points for determination of the same would also be the frequency of the transactions, whether the person is a regular trader in the derivatives market, other sources of income being earned, etc. However, even though the CBDT has tried to clarify the issue, there is still a lot of ambiguity that remains in this area which is going to result in a definite legal tussle with the taxman on a case to case basis.