Commodity Transaction Tax

[Ashutosh Chhawchharia]

Whether Commodity Transaction to be treated as Speculative or Non Speculative Transaction?

[Surender Gupta]

Mr. FM in his budget speech says:

There is no distinction between derivative trading in the securities market and derivative trading in the commodities market, only the underlying asset is different. It is time to introduce Commodities Transaction Tax (CTT) in a limited way. Hence, I propose to levy CTT on non-agricultural commodities futures contracts at the same rate as on equity futures, that is at 0.01 percent of the price of the trade.   Trading in commodity derivatives will not be considered as a ‘speculative transaction’ and CTT shall be allowed as deduction if the income from such transaction forms part of business income. As I said, agricultural commodities will be exempt.

AI Summary

Commodity tax proposed for non-agricultural futures, trading in commodity derivatives treated as non-speculative and CTT deductible when income is business
Proposal to impose a Commodity Transaction Tax (CTT) on non agricultural commodities futures at the same rate as equity futures, excluding agricultural commodities. Commodity derivatives trading is to be treated as non speculative, and CTT paid will be deductible when income from such transactions is included in business income.