Tax Related querry

I have taken arbitrage position for hdfc and icici bank where I had long position in cash and short position in FNO.
I am thinking to consider hdfc and icici bank shares bought in cash as business income where I will calculate turnover of these with the sell value.
Can do this for just these 2 shares since it is actually used for business purpose with arbitrage.
Actually I have other shares too in my demat but, for them I want to consider them as STCG onky and these 2 shares only as a business income


Please go through this circular once…

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Hey @pradeep_kalra,
As per the Income Tax Act and clarifications provided over the years there are 2 factors to keep in mind when deciding how to treat trading income:

  1. Intention of the investor
  2. Nature of the trade

You can treat your trading income as capital gains if your intention is to earn dividend income. Or you can treat it as income from business & profession if your intention is to earn profits from the transactions.

However, keep in mind you cannot change the tax treatment in the following years.

Please can you read the question. It says I want to consider some stocks as business and some as gains becase of the way they are invested. Is it possible?

Can a person be investor and trader together?


Yes you can be both investor as well as trader.
For that - it is better to operate in two different folios; because distinction between trading and investing becomes easier.

Yes, a taxpayer can be both an investor and trader and you can classify and report your trades accordingly. Do keep in mind these points. :slight_smile: