Meaning of term "Speculative Transaction" - (New) Section 66(31) / (Old) Section 43(5)

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....Hedging in business (raw materials/merchandise) • a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchandising business to guard against loss through future price fluctuations in respect of his contracts for actual delivery of goods manufactured, or merchandise sold by him; • (c) Hedging in shares • a contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; • (d) Jobbing or arbitrage by market members • a contract entered into by a member of a forward market or a stock exchange in the course of....

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....Act, 1996  • (ii) Done by banks or mutual funds • electronically on screen-based systems of a recognised stock exchange • (b) Proper documentation • The trade must be backed by a time-stamped contract note issued by the intermediary, which includes: • Unique Client ID alloted under any law in force and • PAN (Permanent Account Number) Under Section 43(5) of the Income Tax Act, 1961 [ Upto 31.03.2026 ] Meaning of "Speculative Transaction" This section defines a speculative transaction to mean a transaction in which a contract for purchase or sale of any commodity, including stocks and shares is periodically or ultimately settled otherwise th....

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....e transaction carried out in respect of trading in derivatives in commodities in a recognised association shall not be deemed to be a speculative transaction provided commodities transaction tax is chargeable to such transaction. • Exception  • A transaction shall be regarded as eligible transaction in derivatives in commodity and thus not being considered as speculative transaction only if following conditions are satisfied: • Transaction is in a commodity other than agricultural commodity • It is carried out electronically on screen based system • It is carried out through a duly registered member or intermediary • It is carried out on a recognized associat....