Portfolio Management Service (PMS)

Income Tax Income from Capital Gains
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I have a couple of investment done under the “Portfolio Management Service” (PMS) category. The question that I have is, whether the returns - gains or losses from such investments, should be treated more as “capital gains” & accordingly estimated or do they actually fall under the “business income” category & therefore needs to be assessed accordingly?

Furthermore, in case I carry out trading on my own - sometimes on a daily basis & many a times quite inconsistently (there could be lot of lull period in between), where does the profit & loss from such equity tradings fall? (same question as earlier).

My last question is, in case somebody deals with intraday trading on a regular basis, how to assess the returns from such investments?

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Hey @kjprajesh,

The taxation would depend on the asset class that the funds are invested in. If those are listed equity shares, tax will be applicable at 10% (LTCG) and 15% (STCG). Similarly, if its some other asset class, the taxation would vary. But regardless, they would be taxed as capital gains.

In case of intraday and F/O trading, the same is reported as business income and taxed as per the applicable slab rate.

Hope this clarifies!

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Hello Ms. Surbhi, thanks for the clarification. All these years, I was filing my returns under the ‘capital gains’ category only/ However, I wanted to be absolutely sure, just in case.

Thanks for taking your time-off & responding to my query.

Best regards,
K. Rajesh.

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