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Taxation Issues in Short Selling

An earlier post on this blog had discussed the introduction of short selling in the Indian market and its implications on the market. Today’s Hindu Business Line has an article that refers to lack of clarify in the taxation regime with respect to short sales. Obviously, there seem to be several loose ends to tie, and the authors hope that the forthcoming Budget and the Central Bureau of Direct Taxes (CBDT) would provide necessary clarification on these aspects.

However, a couple of the issues have already received clarification from the CBDT in a circular issued on February 22, 2008.