The income-tax department has decided to examine around
150 to 200 claims of capital gains and losses made by
stockbrokers under Section 143 (3) of the Income-Tax
Act. The I-T's move is based on the apprehension that
the brokers are suppressing the actual capital gains
under the said section.
Union Budget 2003 had exempted capital gains arising
from shares which make up the BSE-500 index and purchased
after 1 March 2003 and sold after holding the same for
a period of 12 months or more to claim exemption from
payment of capital gains tax.
I-T officials says the department will ask the brokers
to produce the exact details of the transaction, including
date, the exact quantity of shares bought and sold or
vice versa to get any tax benefits under Section 143
(3) of the I-T Act. The officials also indicated that
they suspect a number of brokers take accommodation
bills of short-term losses to offset short-term gains.
is despite the fact that all the stock exchanges gave
undertakings to the Securities and Exchange Board of
India that only the software approved by the market
regulator will be used for transactions, including details
of client code.
will make it very difficult for the brokers to procure
such bills on the basis of reported transactions. However,
in a number of cases, the brokers circumvent the provisions
and rely on bills, which are not reported on the exchanges.
I-T department has also started examining call transactions
of the current month in the derivatives segment. It
suspects these transactions may be accommodation transactions
between two parties and claiming false capital gain