Published on Fri, Jun 15, 2007 at 22:46 | Source : Moneycontrol.com
Updated at Mon, Jun 18, 2007 at 09:38
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CBDT issues new circular on share cap gains
The Central Board of Direct Taxes, or CBDT, has come out with a final circular to determine whether profit from sale of shares is capital gains or business income, reports CNBC-TV18.
The Central Board of Direct Taxes, or CBDT, has come out with a final circular to determine whether profit from sale of shares is capital gains or business income, reports CNBC-TV18.
The CBDT circular says, "Whether a particular holding of shares is by way of investment or forms part of the stock-in-trade is a matter, which is within the knowledge of assessee who holds the shares should, in normal circumstances, be in a position to produce evidence from its records as to whether it has maintained any distinction between those shares, which are its stock-in-trade, and those which are held by way of investment."
The circular adds taxation on capital gain or business income is to be decided based on records and it is case-specific. Volume and holding period of shares will also determine the taxation.
The CBDT circular says, "Whether a particular holding of shares is by way of investment or forms part of the stock-in-trade is a matter, which is within the knowledge of assessee who holds the shares should, in normal circumstances, be in a position to produce evidence from its records as to whether it has maintained any distinction between those shares, which are its stock-in-trade, and those which are held by way of investment."
