Applicability of Sec. 44 AB of Income Tax Act - SHARES F & O.

Manoj (Chartered Accountant) (13 Points)

24 July 2007  

I have a query on Shares Futures and Options.

 

Example,

 

  1. Futures

 

Contract Value   Rs. 3,00,000/-.

Deposit                        Rs. 75,000/-.

Gain / (Loss)              Rs. 2,000

 

Whether Contract Value of Rs. 3 lacs would be considered for the purposes of Section 44AB of Income Tax Act, 1961.

If yes, then for a person doing 12-15 transactions a year, tax audit would be mandatory ?

 

  1. Options

 

Contract Value   Rs. 3,00,000/-.

Premium                     Rs. 7,500/-.

 

Whether Contract Value of Rs. 3 lacs or Premium of Rs. 7,500/- would be considered for the purposes of Section 44AB of Income Tax Act, 1961.

 

 

Note : Assuming Shares Transactions are of the Nature of Business (not Capital Gains).

 

 

There are different opinions of different persons on above subject matter.

Can you throw light on the subject, and, also provide the related circulars/notification references, if any.

 

Regards & Thanks.