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TMI BlogIssue of taxability of surplus on sale of shares and securities - Capital Gains or Business IncomeX X X X Extracts X X X X X X X X Extracts X X X X ..... efines the term capital asset to include property of any kind held by an assessee, whether or not connected with his business or profession, but does not include any stock-in-trade or personal assets subject to certain exceptions. As regards shares and other securities, the same can be held either as capital assets or stock-in-trade/ trading assets or both. Determination of the character of a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would consititute capital gains or business income Disputes, however, continue to exist on the application of these principles to the facts of an individual case since the taxpayers find it difficult to prove the intention in acquiring such shares/securities. In this background, while recognizing that no universal principal in absolute terms can be laid down to decide the character of income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares/securities would be treated as its business income, b) In respect of listed shares and securities held for a period of more than 12 months - In respect of l isted shares and securities held for a period of more than 12 months immediately preceding the date of its transfer, if the assessee desires to treat the income arising from the transfer thereof as Capital Gain, the same shall not be pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gain / Short Term Capital Loss or any other sham transactions. Objective of formulation of principles: Reducing Litigation and ensuring consistency It is reiterated that the above principles have been formulated with the sale objective of reducing litigation and maintaining consistency in approach on the issue of treatment of income derived from transfer of shares and securities. All the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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