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Profit on sale of shares

harsh bondia (B.Com) (24 Points)

05 August 2015

i would like to wether we can treat profit on sale of shares as income from speculations in the below conditions

the shares where intially traded on intraday basis and there after fews days was purchased at full settelment price and there after sold in the same year at a profit.

during the intaday transaction there where losses can i treate the difference of profit and loss as speculation income???

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3 Replies

Praveen Kumar (Student CA Final ) (16 Points)
Replied 15 September 2015

Hi harsh, Since speculative transaction means a transaction in which agreement to buy or sell a commodity (including stocks and shares) is executed without physical delivery of commodiy. Hence tax treatment should be under head "profits & gains from business and profession". Refer section 43(5) .

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jaya krishna (Chartered Accountant) (262 Points)
Replied 15 September 2015

Following transactions can't be taken as speculative transactions 1.trading of derivatives. 2.contract entered into by a member of forward market or stock exchange in the course of any transaction in the nature of jobbing or arbitrage to guard 3.dealing of shares through price fluctuations... In this case you can't treated as a speculative Business it's like a trading in derivatives... Further clarification refer 43(5) exemptions

S S Dahale ( Agri and business) (439 Points)
Replied 05 May 2016

Only trading on intraday trading , that too on major scale rather around 10 trades / day , for more than 60% working days in a year , can be termed as speculative trades / business , rest all squared up within a year are clubbed with business income , and finally sell of shares after a holding period above a year comes under LTCG