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Speculation Loss

11 December 2008

Is there is any difference between day trading(Speculation) and trading in derivatives(Business) for Income Tax Act, 1961?. Is loss on account of day trading (Securities transaction tax paid) of earlier years can be set off against profit from derivatives during this year? (there is an amendment to sec. 43 of ITA, 1961 w.e.f. 1.4.2006)

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2 Replies

CA CHINTAN AJMERA (Chartered Accountant) (2987 Points)
Replied 11 December 2008

This is disputable one. There is lot of order of ITD which contraversies each other about that matter. but it is true that derivative is stcg or bussiness income but not treated as speculative income so u can not setoff speculation loss against derivavtive income.