short term gain shares

[satbir singhwahi]

there is short term gain on sale of shares after stt. Whether interest paid on purchase of shares is deductible exp, as cost of acquisition.

[CA Rachit Agarwal]

Interest paid for the purchase of securities is deductible expenditure.

Interest Cost can be added to the cost of acquisitions. Refer Seciton 48(ii)

[DEV KUMAR KOTHARI]

Investment activity is a business being adventure in nature of commerce ( and not trade). So income should be computed under applicable heads- business, other sources and capital gains. Cost of carrying investments like interest, DP charges, insurance, staff expenses to maintain and look after investment activity  should go under head business, recurring incomes like hedging gains, security commission ( if shares are provided as security to third party), security lending income will fall under business, dividend u/h OS, and income on transfer of shares u/h CG.

AI Summary

Deductibility of interest on share purchases may be treated as acquisition cost or business expense affecting capital gains. Interest on funds used to purchase securities may be treated either as deductible expenditure and added to cost of acquisition for capital gains computation, or as a carrying cost of an investment business to be charged as business expense, with income from dividends treated under other sources and transfer gains under capital gains.