The Hindu Business Line : Share trading gains: Speculative or biz?

I am a salaried employee and a regular tax assessee. I indulge in share trading sporadically. In the current year I have made profits in intra-day trading in the futures market. The trades were through a registered share broker on screen-based trading. Will this gain be treated as speculative or business profits? I have a brought forward speculative loss incurred on intra-day trading in cash market incurred within the last four years. Can I set off the brought forward speculative loss against my current year profits? — Raji Vishnu

Dealing in futures and options will be treated as a business and the gain or loss would be treated as a business income or a business loss. The gain or loss will be treated as business income if (i) the transaction is carried out electronically on screen based systems; (ii) the transaction is carried out through a registered broker or sub-broker; (iii) the transaction is supported by a time stamped contract issued by such broker or sub-broker; (iv) the contract note indicates the unique client identity number and permanent account number. If all these conditions are not satisfied the transactions would become speculative.. If you have satisfied the above conditions, the speculative loss brought forward cannot be set off against such regular business income. The amendment made in section 43(5) which provided that dealing in futures and options will not be treated as speculative if the above referred conditions are satisfied was made from assessment year 2006-07. It may be noted that the Mumbai Bench of the Tribunal in R.B.K.Securities v ITO in ITA No.2465 / Mum / 2006 for the assessment year 2003-04 has held that dealing in derivatives will not result in speculative loss even prior to assessment year 2006-07 since such derivatives are incapable of delivery. If this view were taken it is possible that your brought forward loss is not treated as speculative but as a regular business loss and hence will be eligible for set off against your current business profit from dealing in futures.

I am a salaried software professional. I would like to know the limit of deduction for a self-occupied and let out property which I can claim in respect of principal repayment and interest payment on housing loan taken in 2008. — H. Sivaramakrishnan

If the property is self-occupied, the maximum amount (interest) for deduction will be Rs 1,50,000 but not exceeding the interest on the housing loan. If the property is let out, there will be no restrictions on the amount of interest that can be claimed as deduction in computing income from house property. The principal repayment will qualify for deduction under section 80C. Section 80C allows a deduction in respect of certain payments or deposits. This section restricts the maximum amount of deduction to Rs 1,00,000. One of the payments that qualify for deduction under this section is the principal repayment of housing loan, where the loan is taken from a bank and also from certain other institutions.

I am an Indian resident and am in UK for assignment for more than 180 days in 2008-09. I am paid salary in India as well as in UK and tax is deducted at source on both salaries. If I repatriate my savings to India, will I be liable to pay tax on that amount? What if everything else remains same but my stay outside India is less than 180 days? — Darshan Parekh

It is not clear if the sum paid to you in UK has suffered tax in India. It appears that the tax may have been withheld on the sums paid to you in UK only in UK. If this were so, the said sum may also be taxable in India but credit is to be allowed to you in India in respect of the tax paid on such income in UK but not exceeding the tax payable on such income in India. It may be required to understand the full facts before having further clarity in this matter.

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