Tax on Income from Share Market Trading and Investing | Taxation on Shares and Securities - Part 1

07-Jul-2023 , 09:54:50 am | By CASANSAAR print

Taxation on Shares and Securities - Part 1

Taxation on Trading of Shares

Listed Shares

Unlisted Shares

Taxation on Mutual Fund

Debt Oriented

Equity Oriented

Bonds & Debentures

Listed

Unlisted

Zero Coupon

CBDT Circular No.4/2007 dated 15.06.2007, Circular No. 6/2016 dated 29.02.2016 and Letter F.No. 225/12/2016/ITA.II dated 02.05.2016 may also be referred.

•If the taxpayer himself opts to treat his listed shares as stock-in-trade, the income shall be treated as business income. Irrespective of the period of holding of listed shares. The AO shall accept this stand chosen by the taxpayer.

•If the taxpayer opts to treat the income as capital gains, the AO shall not put it to dispute. This is applicable for listed shares held for more than 12 months.

However, this stand, once taken by a taxpayer in a particular assessment year, shall also be applicable in subsequent assessment years. And the taxpayer will not be allowed to take a different stand in subsequent years.

So before filing income tax returns, you will have to first classify yourself as an investor, trader, or both.

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