capital gain tax? or business income?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 February 2010 In FY2007-08, my share transaction are

Turn over (in total year)is Rs.50 crores.
(i.e, Delivery, intraday, futures and options).

In equity segment i got profit of Rs.6,50,000/- (for less than 1 year)

In futures segment I got loss of 3,00,000/- and in options segment i got loss of 50,000/-

I am an employee of a PSU. In that year my income from salary was Rs.4,00,000/-. And i didnot show this share income.

Now i got notice from ITO and I have to disclose all these.

So How much i have to pay?

Is it 10% of (6,50,000 - 3,00,000 - 50,000) 3,00,000/-
i.e, 30,000 + interest + fine OR ELSE?

If else how much?

Does it come under capital gain tax or business income?

Actually in that same year in my wife account (she is a house wife and has seperate pan no.) i got loss of 3,00,000/-

And in FY2008-09, in my wife account i got a loss of Rs3,00,000/- in Delivery, intraday, futures and options

I am very much in trouble and i am having huge debts. I cant pay much

please answer me.

Bimal Thacker

Bimal Thacker (Expert)
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11 February 2010 Looking to the fact of your transaction volume and other details it is consider as business income.
also you have to findout actual turn over, as details below, because turnover exceeding 40 lacks will require tax audit and non compliance of which result into penalty of 0.5% or Rs.1 lacks whichever is low.
Turn over for your transaction will be as under:
For delivery based transaction actual sales or purchase valus
for F & O transaction the net surplus and deficit will be consider as turnover,
For intraday transaction it will be consider as speculation business and turnover will be as F & O.

Your loss in F & O can be adjusted with Profit on delivery based transaction and net will be your taxable business income.

In case of speculation business, loss can be set of only against speculation business.

Loss in share trading in wife account depends on actual facts whether can be added with your income or not and presentation made to ITO.

In your case I will suggest to take help of good consultant.