Dealing in Equity shares.

This query is : Open

charudatta (Querist)
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24 November 2008 If i transfer my all equity shares to portfolio wherein such shares are traded by Portfolio Managers.
I don't have any other business income. what shall be the nature of profit/loss which i have earned through portfolio?(either capital gain /loss or business income/loss).
please reply me with reasons.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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24 November 2008 As per cicular No. 4/2007 dated 15.06.2007, Purchase and sale of shares with a motive of earning profit would result transaction in the nature of trade/adventure in the nature of trade, but where the object of transaction is to derive income by way of dividend etc. then the profit accruing by change in such investment will yield capital gain and not revenue receipts.

So it is clear that if you will regularly trading in shares then it will be treated as Business Income.