Losses in Speculation Business - Section 73

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..... sequent year only against the income of any speculation business. Such loss is allowed to be carried forward for 4 AYs immediately succeeding the AY for which the loss was computed. Section 43(5) : 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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..... be carrying on a speculation business to the extent to which the business consists of sale and purchase of shares. This shall not apply to the following companies: Investment Company i.e. the company whose total income mainly consists of income from House Property, capital gains and income from other sources. Company whose principal business is of Banking or of granting loans and advan .....

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..... Explanation to section 73 is applicable only for sale and purchase of shares. The said explanation is not applicable if the company is in the business of sale and purchase of units, debentures. Exceptions to Speculative Transactions: Hedging contract in respect of raw materials or merchandise Hedging contract in respect of stocks and shares Forward contract Trading in der .....

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