Accounting & Taxation Issues relating to Capital Market Transactions

(C ) ALL USUAL BUSINESS EXPENDITURE ARE
DEDUCTIBLE.
(D) INTEREST ON BORROWED MONEY IS
DEDUCTIBLE.
(E) (i) SECURITY TRANSACTION TAX – REBATE U/S 88 E
Rebate of STT U/s 88 E discontinued w.e.f. 1.4.2009 (Assessment
Year 2009-10)
(ii) Rates of STT :
‣ STT has to be paid by buyer as well as seller in the delivery
based trade.
‣ STT will be levied on sale or purchase of an equity share
(payable by seller or buyer) in a company or a unit of an equity
oriented fund, where the transaction of such sale or purchase is
entered into in a recognized stock exchange and settled by actual
delivery or transfer. The rates are :
1.10.2004 to 31.5.2005 0.075%
1.06.2005 to 31.5.2006 0.1%
From 1.06.2006 0.125%
STT is to be paid at above rates in case of
a) Purchases by the purchaser and
b) Sales by the seller.
(iii) STT paid is an allowable expenditure from Asstt. Year 2009-10
due to deletion of sec. 40 (a) (ib) w.e.f. 1.4.2009.
(F)
CARRY FORWARD & SET OFF OF LOSSES U/S 70,71,72 – for
full details please see taxation of derivatives.
(G)
Set off with commodity transactions.
As discussed in taxation of derivatives.