Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT RATES :: articles on VAT and GST in India :: empanelment :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: form 3cd :: cpt :: due date for vat payment :: TDS :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company
 
 
News Headlines »
 How to time your buys to have best of two tax regimes
 Here's why you must always check Form 26AS before filing tax return
 Want to file your income tax return after June 30? Having Aadhaar card is a must
 Timeline for filing of tax returns extended by two months
 Top 5 common mistakes to avoid while filing your income tax returns
 GST rollout on July 1: Deadline for filing tax returns extended
 What is GST?
 Income-tax (15th Amendment) Rules, 2017?
 Banks get a breather as GST Council extends deadline for tax filing
 Income Tax filing: Your easy guide in 7 steps
 E-filing income tax return: How individuals can upload any ITR using excel utility

Income from stock lending is taxable
February, 27th 2008
Income generated from the business of stock-lending and sale-repurchase of shares by a borrower will be taxable.

TAXING TIMES

  • The Central Board of Direct Taxes (CBDT) has exempted stock lending/borrowing from the purview of securities transaction tax (STT) and capital gains tax
  • Borrowers will make some payment to lenders of shares by way of interest or fees that will be income in the hands of the lender
  • While selling the shares, borrower will not be paying any tax as the gain from such sale is not known
  • However, the Central Board of Direct Taxes (CBDT) has exempted stock lending/borrowing from the purview of securities transaction tax (STT) and capital gains tax. CBDT has issued a circular in this regard to the income tax field formations.
     
    Borrowers will make some payment to lenders of shares by way of interest or fees that will be income in the hands of the lender.
     
    It will be treated as income from business of lending/borrowing or income from other sources of income and will be taxable at applicable rates, said a finance ministry official.
     
    While selling the shares, borrower will not be paying any tax as the gain from such sale is not known. But when a borrower repurchases shares to return to the lender, the margin between sale and re-purchase will be treated as profit from business or capital gains depending on the tax treatment of shares as per CBDT rules, the official said.
     
    If the shares transacted are treated as capital assets, then short term capital gains tax will be levied at the rate of 10 per cent. If they are treated as trading asset, the tax rate could be as high as 30 per cent.
     
    Another big issue likely to come up is - whether stock lending and borrowing will be treated as a speculative activity. According to sources, the income tax assessing officers can treat the stock lending/borrowing as speculative transaction.
     
    That means, losses on speculative business will not be allowed to be set off against income from normal business for claiming tax refund or reducing tax liability.
     
    According to the government official, there were two issues before the CBDT - (i) whether lending/borrowing of securities under securities lending and borrowing scheme will amount to transfer under clause 47 of the Income Tax Act, in the hands of lender?
     
    (ii) Whether lending/borrowing of securities will be subjected to securities transaction tax?
     
    Both the issues have been taken care of in the circular.
     
     
    Home | About Us | Terms and Conditions | Contact Us
    Copyright 2017 CAinINDIA All Right Reserved.
    Designed and Developed by Binarysoft Technologies Pvt. Ltd.
    Software Development Software Programming Software Engineering Custom Software Development Requirement Based Software Development Software Solutions Software Serv

    Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions