Stock brockers

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Pav Ni (Querist)
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29 June 2012 Hi,
Is stock brocker income is chargeable under business or capital gains.If he has F&O can he get the setoff of this with business loss. What are the tax benefits and deductions available for stock brockers. What are the deductions available to F&O transactions(expenses).

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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29 June 2012 Stock Brokers are those persons who are entering into transactions in stock exchange on behalf of their clients. The income earned in this way is their business income.
A broker can claim all the business expenses
which are incidental and exclusively incurred for his business.
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If Mr X is a client of a broker and he is making investment in shares. He will earn Capital Gains. If Mr. X is entering into transactions as a trading activity, his income will be termed as business income.
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The F&O transactions are treated as normal business transactions and as such against F&O profit loss of a non speculative business can be set off. However, Capital Loss can not be set off against Business Profit.
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