« Top Headlines » Open DEMAT Account in 24 hrs  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately  Income tax returns: ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing  Section 80DDB tax benefits for specified illnesses: 5 things to know  Income tax slabs FY 2024-25: Five tips to help taxpayers decide between old and new income tax regimes  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 (AY 2024-25) available now on e-filing income tax portal  How To Save Tax For Salary Above 15 Lakhs? «  Pieces in the Budget jigsaw... Error of judgment... » Income from stock lending is taxable February, 27th 2008 Income generated from the business of stock-lending and sale-repurchase of shares by a borrower will be taxable. TAXING TIMES The Central Board of Direct Taxes (CBDT) has exempted stock lending/borrowing from the purview of securities transaction tax (STT) and capital gains tax Borrowers will make some payment to lenders of shares by way of interest or fees that will be income in the hands of the lender While selling the shares, borrower will not be paying any tax as the gain from such sale is not known However, the Central Board of Direct Taxes (CBDT) has exempted stock lending/borrowing from the purview of securities transaction tax (STT) and capital gains tax. CBDT has issued a circular in this regard to the income tax field formations.   Borrowers will make some payment to lenders of shares by way of interest or fees that will be income in the hands of the lender.   It will be treated as income from business of lending/borrowing or income from other sources of income and will be taxable at applicable rates, said a finance ministry official.   While selling the shares, borrower will not be paying any tax as the gain from such sale is not known. But when a borrower repurchases shares to return to the lender, the margin between sale and re-purchase will be treated as profit from business or capital gains depending on the tax treatment of shares as per CBDT rules, the official said.   If the shares transacted are treated as capital assets, then short term capital gains tax will be levied at the rate of 10 per cent. If they are treated as trading asset, the tax rate could be as high as 30 per cent.   Another big issue likely to come up is - whether stock lending and borrowing will be treated as a speculative activity. According to sources, the income tax assessing officers can treat the stock lending/borrowing as speculative transaction.   That means, losses on speculative business will not be allowed to be set off against income from normal business for claiming tax refund or reducing tax liability.   According to the government official, there were two issues before the CBDT - (i) whether lending/borrowing of securities under securities lending and borrowing scheme will amount to transfer under clause 47 of the Income Tax Act, in the hands of lender?   (ii) Whether lending/borrowing of securities will be subjected to securities transaction tax?   Both the issues have been taken care of in the circular.