- Meaning: Speculation transaction means a transaction involving a contract for purchase and sale of commodities, including stocks and shares which is periodically or ultimately settled other than by actual delivery or transfer of commodities.
- Exceptions: A contract entered into to guard against loss due to price fluctuation in the following cases-
- In respect of raw materials or merchandise in the normal course of business
- In respect of stocks and shares entered by dealers
- In respect of a contract entered by a member of a forward market or stock exchange in the course of jobbing or arbitrage
- Transfer of derivatives – Not a speculative transaction:
- Eligible transaction in respect of trading in derivatives carried out in a Recognized stock exchange.
- Eligible transactions means transactions-
- Carried out electronically on screen-based systems through stock-broker or sub-broker or such other intermediary registered under SEBI Act 1992 or SCRA, 1956 or Depositories Act, 1996, or by banks or mutual funds in a Recognized stock exchange.
- Transaction should be supported by a time stamped contract note issued such stock-broker or sub-broker or intermediary to every client indicating therein unique client identity number allotted under that Act and PAN under Income Tax Act, 1956.
