share trading

This query is : Resolved

sujit birajdar (Querist)
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09 June 2009 suppose Assessee is salaried.

1.He also doing share trading then the income from share trading is

How to bifurcate the income between.

a. speculative tran. (intra day)or
b. business income or
c. short term / Long term.

tell me also in above condition the applicability of tax audit.

CA.BHARAT BHUSHAN

CA.BHARAT BHUSHAN (Expert)
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09 June 2009 As you discussed in you query of Speculating income...it will always be business income...total OF profit AND loss shall be added in turnover for the purpose of section 44AB.
Secondly, there is no clear cut policy of ITD regarding the treatment of sharing trading...whether to treat it business income or capital gain, but the intention of the investor matters i.e.with which intention it invested his money.To avoid the litigations you may prefer to adopt the method to treat it as business income...since in this method...department is in benefit. Transaction of F & P are also of business in nature.

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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09 June 2009 1. Intra day trading income is "Spreculative Business Income".

2. Other than intra-day, it depends upon the nature and facts of your case such as number of transactions, presentation in books of accounts etc.

If it is non-delivery based, Profit and Loss (both) as opined by Mr.Bharat are to be taken as turnover for the purpose of Tax Audit.

Otherwise the entire transaction amount is to be taken into account, if the income is treated as business income.

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