A tax P&L visualizes your tax liability under the heads of Capital gains and Business Income arising from shares and securities transactions. The report includes details of segment-wise (Equity shares, Mutual Funds, Equity Intraday & FnO) trading such as:

  • Scrip Name
  • Buy Value
  • Sell Value
  • Trading Expenses


1. Capital Gains cover gain or loss from the selling of Equity Shares (except intraday transactions), Mutual Funds (MF), Restricted Stock Units (RSU), Equity Traded Funds (ETFs), and Employee Stock Option Plans (ESOPs).

2. Business Income covers Equity Intraday transactions, Futures, and Options (FnO)



Consider these with regards to the Tax P&L of 5paisa:


1. Expenses

  • The Tax P&L covers transfer expenses that are directly related to trading transactions.

Transfer expenses such as brokerage, GST, transaction charges, STT, and stamp duty are given separately under Equity shares transactions

However, in case of Mutual Funds transactions, the transfer expenses are included in the buy price & sell price.

  • BKRSCR is a brokerage expense charged at the end of the day and cannot be segregated at the scrip/trade level.
  • In case of Intraday and FnO transactions, you can also claim other expenses such as internet expenses, legal fees, subscription expenses, depreciation, etc, which are not covered in the Tax P&L report.


2. Calculation of Long Term Capital Gain (LTCG) u/s 112A

LTCG on the sale of securities (on which STT is paid) bought on or before 31 January 2018 should be calculated using the grandfathering rules. As per this rule, the cost of acquisition is computed after considering the Fair Market Value (FMV) as on 31 January 2018 as per section 112A.

  • The FMV is not considered while computing LTCG for each trade in the tradewise Tax P&L report.


3. Calculation of Turnover

Turnover for intraday and FnO transactions can be calculated in two different methods:

  1. Tradewise Method
  2. Scripwise Method 
Read more about Tradewise & Scripwise methods of reporting trades.


Intraday

Intraday trading means trading on the stock market on a same-day basis. This means the trader is buying and selling securities on the same day itself. 

  • Turnover

For all intraday transactions, the aggregate or the absolute sum of both positive & negative differences from trades is to be considered as a turnover.

  • Profit/Loss

The gross P&L is calculated by summing up the overall sales amount reading by the buy amount.

So, Net P&L = Gross P&L - Transfer expenses


Here, the net P&L and gross P&L shall remain the same, as transfer expenses are adjusted in the buy and sell values of respective scrips or trading transactions. Hence, transfer expenses are disclosed as NIL.


Futures & Options (FnO)

FnO in the share market are contracts that derive their price from the underlying assets, such as equity shares, a commodity, or stock market indices. These contracts are signed by two parties for trading a stock asset at a predetermined price on a future date.

In the tax P&L, FnO turnover and profit/loss are computed by considering the following trade segments

  1. Equity Futures & Options
  2. Commodity Futures & Options
  3. Currency Futures & Options
  • Turnover

For Futures transactions, turnover = absolute(sell value-buy value)

For Optinos transactions, turnover = absolute(sell value-buy value) + sell value 

  • Profit/Loss

The gross P&L is calculated by summing up the overall sales amount reading by the buy amount.

So, Net P&L = Gross P&L - Transfer expenses


Here, the net P&L and gross P&L shall remain the same, as transfer expenses are adjusted in the buy and sell values of respective scrips or trading transactions. Hence, transfer expenses are disclosed as NIL.