Please let me know about taxation of MCX trading. What is the time of recoginistion of income/loss? whether it is on daily settlement basis? OR only at the time of transfer of funds from MCX account to Saving account.
The CBDT has issued Notification No. 46/2009, dated 22-5-2009 by which Multi Commodity Exchange of India Ltd (MCX ) has been recognised under section 43(5)(d) which means that the trade in derivatives through MCX exchange will now be regarded as Business transaction and therefore , the loss , if in unfortunate event of incurring loss will be allowed to be adjusted with any other business income or or from other heads. If you trade through , NCDEX , you will not have this facility.
The the notification 46/2005 dated 22-5-2009 is given below
In exercise of the powers conferred by clause (ii) in the Explanation to clause (d) of the proviso to sub-section (5) of section 43 of the Income-tax Act, 1961 (43 of 1961), read with rule 6DDB of the Income-tax Rules, 1962, the Central Government hereby notifies MCX Stock Exchange Ltd. as a recognized stock exchange for the purpose of the said clause with effect from the date of publication of this notification in the Official Gazette.
2. MCX Stock Exchange Ltd. shall separately maintain data regarding all transactions registered in the system in which client codes have been allowed to be changed for periodical inspection by the Director-General of Income-tax (Investigation) having jurisdiction over such exchange and provide copies of the relevant information as and when required.
3. The Central Government may withdraw the recognition granted to MCX Stock Exchange Ltd. if any of the conditions specified in rule 6DDA of the Income-tax Rules, 1962, subject to which the recognition is granted, is violated.
4. This notification shall remain in force until the approval granted by the Securities and Exchange Board of India is withdrawn or expires, or this notification is rescinded by the Central Government as provided in sub-rule (5) of rule 6DDB of the Income-tax Rules, 1962.