Kamal RathiQ I regularly buy and sell shares through NSE. I trade in shares for a short-term — say 3 months. Will this gain be treated as business income or capital gains and I also have income from other sources like bank interest, post office MIS, etc. I wanted to know if I can enjoy full basic exemption of Rs 1.8 lakhs available to woman assessee for the assessment year 2009-10S. RadhikaVia emailA The issue of treatment of buying and selling of shares under the head "capital gains" or "business" will be determined on the facts and circumstances of the case.The issue of whether such income will be treated as business income or capital gains can be decided based on the period of holding, the frequency of such transactions, the motive ofthe transaction, which is to be examined based on the facts.Also, the entries in the books, the infrastructure deployed such as employees, nature of system monitoring, the source of funds — whether own funds or borrowed funds. Each of the facts has to be examined to arrive at a decision of treating it as income from business or as capital gain. As regards the claim of full basic exemption, the same can be done whether the income is assessed as capital gain or as business income.It is pertinent to note here that Section 111A which provides for special rate on short term capital gains, where the gain is from sale of shares through a recognised stock exchange, makes a specific provision that the basic exemption that is not exhausted against the other income of an individual or HUF can be reduced from such short term capital gain and the tax computed on the gain as so reduced.Q My husband was a bank employee. I am receiving a monthly pension after his death. I want to know how the pension income shall be taxed in my hands Am I entitled for any tax exemptionSwarna LathaVia emailA Your income shall be taxed under the head "income from other sources".You are entitled for a deduction of 33.33 per cent out of your pension income subject to a ceiling limit of Rs 15,000 under Section 57iia of the Income Tax Act.Kamal Rathi is a chartered accountant, representingRathi & Malani, a Hyderabad-based accounting firm. Readers can mail their queries on income-tax tokamalrathi.ca@gmail.com