Stock market - trading

[Asked by Guest]

a) Whether a day trading in stock market is a trading business and profit or loss be trated as business profit or loss? b) In a closing of a year if a trader buys shares which is not sold as on 31st March,whether the same would be treated a stock or investment as at closing of year c) whether day trading will suffice to proof a trader or investor and if a trader takes delivery of share is there any periodicity which identifies a stock a trading or investment stock

[Surender Gupta]

In income tax, there are different circumstances in which a particular transaction may be treated as differently. Therefore, you need not consult your tax consultant with detailed query.

AI Summary

Trading classification determines tax treatment; factual circumstances decide if day trading is business income or investment.
Whether profits or losses from day trading are treated as business income depends on the factual matrix: frequency, intention, organization, nature of operations, and whether activities exhibit businesslike continuity. Shares unsold at year end are classified as stock-in-trade or investment based on intention, holding pattern, and nexus to trading operations; delivery and periodicity are relevant indicators but not conclusive, requiring assessment of all facts to determine tax characterisation.