Hello,
If A has a propreitory trading account, and uses that account to sell long term held shares (which have not entered the trading account thus far), on his personal account, can the Revenue authorities chose to treat that as part of trading account. These shares are very long term and with indexing also there would be no capital gains. They have been held for several years. When sold through the propreitory account, because he did not have a personal trading account, he delivered the shares from his demat to the broker into the trading account.
How exactly can this be interpreted legally by the tax authorities.
Option A; The sales is through trading account, so revenue is part of trading. If so show the cost of the shares as that on the date of delivering the share/sales and then there is no profit on that transaction. But the individual has to show capital gains on transfer to his trading account (here applying indexation gain is again zero). But has the individual to declare this in the IT return form with all details and does the form provide for this. Can one say receipts this, cost is this, gain is zero. so it finds a mention in the return. And the ITo cannot claim that there was concealment.
Option 2: Do declare this as capital gains on personal account. Declare the receipt and the cost and gain equal to zero. In this case STT has been paid, asthe shares were sold through own propreitory account.
I want to know the correct legal position and what is the best way to treat it and disclose.
Thanks in advance
Sesh
