NSE Commodities Segment gets recognition from CBDT

Mumbai, November 29, 2019: National Stock Exchange of India Ltd (NSE), India’s leading stock exchange has received the approval as ‘Recognized Association’ for commodities segment.

This approval will benefit traders in relation to trading in commodity derivatives segment of NSE as the derivative income shall be treated as business income. Furthermore, all the benefits / deductions under the Income Tax provisions relating to business income including carried forward and set-off of losses shall also be available.

The approval is required as per section 43(5)(e) of the Income Tax Act, 1961, which states that transactions in relation to commodity derivatives shall be taxed as business income provided the same has been done on Recognized Association. The recognition is subject to approval by Central Board of Direct Taxes (CBDT) and fulfilling specified conditions. CBDT pursuant to the application made by NSE has observed that NSE has complied with all the necessary conditions and thus accorded the approval.