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What is Speculative bussiness

CA Manjith (Senior Associate) (154 Points)

13 March 2010

what is speculative bussiness?????

can any one explain that in simple language by using some example??

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5 Replies

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 13 March 2010

"Speculative transaction" means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips.

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Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 13 March 2010

However Futures & Options in shares & currency are not considered as Speculative business for Income Tax purpose

CA Manjith (Senior Associate) (154 Points)
Replied 13 March 2010

that's the definition!!!!!!!!

can u give an example??????

Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 13 March 2010

Example would be you purchase 100 Reliance Industries Shares at Rs. 1015/- and sell the 100 shares on the same day at Rs. 1020/- thereby earning a profit of Rs. 500/-. This profit is speculation profit.