Scripwise and Tradewise are two different methods of reporting trades, calculating P&L and turnover.
Calculating turnover trade-wise is the most compliant way of determining turnover.
Calculating turnover scrip-wise makes the turnover calculation easier by combing all the trades in one go.
- Scripwise Method: In this approach, turnover is calculated by collating all trades on the particular contract/scrip for the financial year and summing up the absolute value of profit and loss for each script
- Tradewise Method: In this approach, turnover is calculated by summing up the absolute value of profit and loss of every trade done during the financial year.
In both methods, the P&L shall be the same, but there can be a difference in the turnover calculation which in turn shall affect a person's tax audit applicability.
Read more on Trading Turnover.
Here's how you can upgrade to the Pro Plan & avail the benefit of scripwise method of reporting trades.
Let us take an example for Equity transactions:
Reliance Industries Limited (RIL) trade-wise transactions are given below:
|Company||Trades||Quantity||Buy Value||Sale Value|
Trade wise reporting of Reliance Limited:
Trade:1 Profit/Loss = Sale value- Buy value (i.e. 36,000-34,000) = 2,000 (Profit)
Trade:2 Profit = Sale value- Buy value (i.e. 5,000-6,000) = -1,000 (Loss)
Scripwise Reporting of Reliance Limited:
Total Buy value = INR 40,000 (i.e Trade 1 buy value + Trade 2 buy value)
Total Sale value = INR 41,000 (i.e Trade 1 sale value + Trade 2 sale value)
Total Profit/Loss = INR 1,000 (i.e Trade 1 Profit + Trade 2 loss)
Calculation of Trading Turnover
(by taking the above example of RIL)
Here, trading turnover for Intraday and Futures & Options transactions is calculated by summing up all Absolute Profit (i.e. the sum of absolute values of profit or loss)
- Trade-wise Turnover = 2,000 + 1,000 = 3,000 (i.e Trade 1 absolute value + Trade 2 absolute value)
- Scrip-wise Turnover = 1,000 (i.e absolute value of total profit of reliance scrip)
1. Futures & Options (F&O) include equity, commodity & currency transactions.
2.Turnover calculation is required only in business income, i.e., Intraday and F&O transactions.