Capital gain return

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omsai (Querist)
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11 May 2016 how I make capital gain computation with business return and this capital gain is will make on trading of shares pls help and tell me solution for this

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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12 May 2016 In case of sale and purchase of shares you have take into consideration the following rules
1) If it is intra day sales and purchased then it is either speculation profit or loss as the case may be.
2) If the purchase and sales is made for shares held for less than 3 months then the profit or loss shall be Business Income.
3) If the sales and purchase of shares have been made by holding above 3 months but less than 1 year then the profit or loss shall be short term capital gains.
4) If holding is more than 1 year then it is long term capital gains and is exempted from tax.

The intention of the investor is also to be considered and if it is shown as Investment then the above rule will apply but if it is stock in trade then always it is a business income or business loss. In that case the stock is to be valued on cost or market whichever is lower.