Taxability of surplus on sale of shares and securities - Instructions in order to reduce litigation- (Ministry of Finance ) (29 Feb 2016)
MANU/DTCR/0007/2016
Direct Taxation
The Central Board of Direct Taxes issued instructions in situations when Assessing Officers hold whether surplus generated from sale of listed shares or other securities would be treated as Capital Gain or Business Income, taking into account various factors. The same would not be applicable in respect of transactions of shares or securities when the genuineness of the transaction itself was in question.
'Capital asset' including 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. Shares and other securities can be held either as capital assets or stock-in-trade/ trading assets or both. Determination of the character of a particular investment in shares or other securities, whether the same is in the nature of a capital asset or stock-in-trade, is a fact-specific determination and has resulted in a lot of uncertainty and litigation.
Tags : CAPITAL ASSET SHARES DETERMINATION LITIGATION
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