Short term capital gains from shares traded with stt.

This query is : Open

roameri (Querist)
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02 January 2013 Dear Sirs:

I buy/sell shares on NSE frequently. At times I buy a share on T1 and sell it on T2. All trades are delivery based and all shares are duly credited and debited in my DP A/c.All trades are STT charged. Can the I.T. claim that I cannot take these trades as “ Short Term Capital Gains” just because they are (a) done in volumes (b) they are held for a short period ? I do not do day-trading or F & O trades. All shares are delivered and credited to my depository and subsequently debited. I have no business income or salary income.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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02 January 2013 IF THERE IS NO LOSS TO THE REVENUE , IT WILL NOT MAKE ANY OBJECTION.
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KEEPING THE EVENTUALITY IN THE MIND DEBIT CERTAIN LEGITIMATE EXPENSES TO YOUR CAPITAL ACCOUNT AND SHOW SEPARATELY THE SHARE TRANSACTION RELATED EXPENSES ALSO.
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IF HE CONSIDERS IT BUSINESS INCOME, HE HAS TO TAKE INTO CONSIDERATION SUCH EXPENSES ALSO. ANALYSE THE POSITION BEFOREHAND.
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IN THIS WAY REVENUE OR AO WILL NOT TRY TO MAKE A FUTILE EXERCISE IF YOUR PROFIT IS 5-8 LACS.
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roameri

roameri (Querist)
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02 January 2013 Dear Mr. Bafna:
1.I only add/deduct Brokerage and Brokerage Service Tax to the Traded price. No other deductions are made. STT cannot be taken as a deduction.
2.The Revenue seeks ways to collect more tax. So if they can classify it as a "Profit from Business" , they will get 30% instead of 15% in the case of STCG.
3. Since there is a high frequency and since the shares are held for short periods, cannot delivery justify the investment angle and classify the same only under STCG.
Thanks,

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