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: due date for vat payment :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: cpt :: articles on VAT and GST in India :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: VAT RATES :: TDS :: form 3cd
 
 
« News Headlines »
 Govt extends service tax return filing date to April 30
 No move to tax farm income, clarifies Arun Jaitley
 New board for indirect taxes to become operational from June 1
  9 changes that came into effect from April 1
 First time filing income tax? Here's all you need to know about Form 16 and Form 26AS
 New Opening Financial Controller Chartered Accountant (Manufacturing Plant) A Leading Company
 Income Tax Filing 2017: All you want to know about the single page ITR form SAHAJ
 How to benefit from investments in tax saving mutual funds
 60 per cent of income tax notices on fishy cash deposits returned
 All about income tax return form Sahaj
 Why seeing Form 26AS is a must before filing tax return and how to access it

Tax experts see CBDT circular on securities lending as let-down
February, 28th 2008
The Central Board of Direct Taxess (CBDT) clarificatory circular on taxation issues under the securities lending scheme has been a let-down for many tax experts, who contend that the department has only reaffirmed the existing provisions in law and not thrown light on the real issues that players such as the foreign institutional investors (FIIs) were looking forward to.

Although the CBDT circular has cleared major doubts on taxation issues relating to the lending and borrowing of securities for settlement of securities that are short sold, some tax experts point out that issues such as the taxability of lending charges received by FIIs need clarity.

They also highlighted that the circular remains silent on whether short selling of shares would be considered as speculative transactions or not.

The CBDT has in a recent circular said that transactions of lending and borrowing are not liable to securities transaction tax (STT).

It has also been clarified that lending/borrowing of securities under the securities lending scheme would not amount to transfer and therefore no capital gains would be levied on the lender.

All this circular does is to confirm the existing provisions in law. It has only reaffirmed the law.

FIIs would still have to do their own analysis and take a call. Even without complete clarity on certain taxation issues, I think they would go ahead and take decisions on short selling of securities, Mr Hiresh Wadhwani, Partner, Direct Tax, Ernst & Young India.

Mr Sunil Gidwani, Executive Director, PricewaterhouseCoopers, also felt that taxability of lending charges received by FIIs need clarity.

He also highlighted that the circular did not address the issue of whether profits made by FIIs from short selling would be treated as capital gains or business income (trading profits).

Clarity required

The tests provided in an earlier CBDT circular for making a distinction between an investor and trader cannot be applied in situations of short selling of securities, Mr Gidwani said.

Ms Behrose Kamdin, Director, KPMG said that clarity was needed on whether short selling of shares was a speculative transaction or not.

As the delivery of shares is given in a short sale transaction by resorting to borrowing, the profit earned on a short sale should not be speculative profits, she said.

Moreover, she said that clarity was needed on whether the cost involved on the borrowing of securities should be deducted /added while computing the capital gains /losses arising from short selling.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Outsourcing Test Solutions Software Testing Software Bug Testing Software Issues Tracking Software Issue Fix Software Code Optimization Database Design Optimization

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