13 September 2013
To know speculative business, we should first know what is speculative transaction.
As per Section 43(5) of the Income Tax Act, 1961, intra-day trading shall be considered as speculation business transactions and the income therefrom would be either speculation gains or speculation losses. Income from speculation gains is taxed at the normal rates.
As Per Sec 43 (5), Speculative Transaction means a transaction in which a contract of purchase or sale of any commodity including stocks and shares, is periodically or ultemately settled otherwise than by the actual delivery or transfer of the commodity or scriptts. It is to be noted that profit or loss from derivative trading carried out through a recognized stock exchange shall not be treated as profit or loss from speculative business.
However, derivative trading in commedities shall continue to be treated as speculative transaction.
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