15 September 2011
Whether the transaction of shares or securities under the future and option are taxable under the head PGBP (Profit & Gains from Business profession) or the transactions are treated as speculative transaction.
REFERENCES GIVEN IN THE INCOME TAX ACT ARE AS UNDER;
Definition u/s 43(5) of the Income Tax Act’1961:
"Speculative transaction” means transaction in which contract for purchase or sale of any commodity, including stocks and shares is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrip;
As per the proviso (d) of Section 43(5)
An eligible transaction in respect of trading in derivatives referred to in clause ac of section 2 of The Securities Contracts (Regulation) Act’1956 carried out in a recognized stock exchange
Section 2(ac) of The Securities Contracts (Regulation) Act’1956
Derivatives includes – A) a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security. B) A contract which derives its value from the prices, or index of prices of underlying securities;
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