(5)"speculative transaction" means a transaction in which a contract for the purchase or sale of any commodity, including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips:Provided that for the purposes of this clause-(a)a contract in respect of raw materials or merchandise entered into by a person in the course of his manufacturing or merchanting business to guard against loss through future price fluctuations in respect of his contracts for actual delivery of goods manufactured by him or merchandise sold by him; or(b)a contract in respect of stocks and shares entered into by a dealer or investor therein to guard against loss in his holdings of stocks and shares through price fluctuations; or(c)a contract entered into by a member of a forward market or a stock exchange in the course of any transaction in the nature of jobbing or arbitrate to guard against loss which may arise in the ordinary course of his business as such member; [or] [ Inserted by Act 18 of 2005, Section 14 (w.e.f. 1.4.2006).](d)[ an eligible transaction in respect of trading in derivatives referred to in clause] [ Inserted by Act 18 of 2005, Section 14 (w.e.f. 1.4.2006).] [(ac)] [ Substituted by Act 21 of 2006, Section 11, for " (aa)" (w.e.f. 1.4.2006).] [of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) carried out in a recognised stock exchange;] [ Inserted by Act 18 of 2005, Section 14 (w.e.f. 1.4.2006).](e)an eligible transaction in respect of trading in commodity derivatives carried out in a [recognised stock exchange][Sub. for "recognised association" by the Act No. 12 of 2020, w.e.f. 1-4-2020], which is chargeable to commodities transaction tax under Chapter VII of the Finance Act, 2013 (17 of 2013),shall not be deemed to be a speculative transaction:[Provided further that for the purposes of clause (e) of the first proviso, in respect of trading in agricultural commodity derivatives, the requirement of chargeability of commodity transaction tax under Chapter VII of the Finance Act, 2013 shall not apply.] [Inserted by Finance Act, 2018 (Act No. 13 of 2018), dated 29.3.2018.][Explanation. - For the purposes of this clause, the expressions-(i)"eligible transaction" means any transaction,—(A)carried out electronically on screen-based systems through a stock broker or sub-broker or such other intermediary registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) in accordance with the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) and the rules, regulations or bye-laws made or directions issued under those Acts or by banks or mutual funds on a recognised stock exchange; and(B)which is supported by a time stamped contract note issued by such stock broker or sub-broker or such other intermediary to every client indicating in the contract note the unique client identity number allotted under any Act referred to in sub-clause (A) and permanent account number allotted under this Act;(ii)"recognised stock exchange" means a recognised stock exchange as referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and which fulfils such conditions as may be prescribed and notified79 by the Central Government for this purpose;Explanation 2.—For the purposes of clause (e), the expressions—(i)"commodity derivative" shall have the meaning as assigned to it in Chapter VII of the Finance Act, 2013;(ii)"eligible transaction" means any transaction,—(A)carried out electronically on screen-based systems through member or an intermediary, registered under the bye-laws, rules and regulations of the 80[recognised stock exchange][Sub. for "recognised association" by the Act No. 12 of 2020, w.e.f. 1-4-2020.] for trading in commodity derivative in accordance with the provisions of the Forward Contracts (Regulation) Act, 1952 (74 of 1952) and the rules, regulations or bye-laws made or directions issued under that Act on a 80[recognised stock exchange]; and(B)which is supported by a time stamped contract note issued by such member or intermediary to every client indicating in the contract note, the unique client identity number allotted under the Act, rules, regulations or bye-laws referred to in sub-clause (A), unique trade number and permanent account number allotted under this Act;[(iii) "recognised stock exchange" means a recognised stock exchange as referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and which fulfils such conditions as may be prescribed and notified by the Central Government for this purpose;]
