You can download the Tax P&L Report from Zerodha Console.[sc name="read-more" link="https://learn.quicko.com/download-tax-pl-report-zerodha-account" title="How to Download Tax Profit & Loss report from Zerodha?" description="Step-by-step guide to download Tax P&L from Zerodha Console " ][/sc]
The report includes details of segment wise trading - scrip name, buy value, sell value, buy price, sell price, realized profit, and trading expenses.
This Tax P&L Report can be used to prepare P&L A/C to report it in the Income Tax Return.
However, the trader must take care of the following things where the treatment as per Income Tax may differ.
The Tax P&L Report covers expenses that are directly related to trading transactions. For example brokerage, turnover fees, STT, transaction charges, GST, stamp duty, etc.
However, you can also claim other expenses related to the trading income such as internet expense, legal fee, subscription expenses, depreciation, etc which are not covered in Tax P&L Report.
- Buy Back Gains
When a company buys back shares issued by it from an existing shareholder, it results in capital gains for the shareholder. Such buyback gains would be included in the Tax P&L Report.
As per a recent amendment in Budget 2019, the gains from buy-back are exempt in the hands of the individual since the company is now liable to pay the buyback tax under Section 115QA. If such buyback gains have been included under Capital Gains in Zerodha, you can omit the buyback gains and report them under Exempt Income in the ITR.
- Calculation of Long Term Capital Gains under Section 112A
LTCG on the sale of securities (on which STT is paid), bought on or before 31st Jan 2018 should be calculated using the Grandfathering Rule. As per this rule, the Cost of Acquisition is computed after considering the FMV as on 31st Jan 2018 as per Section 112A.
Zerodha Tax P&L Report does not provide the FMV in the scrip wise data for each segment. Thus, the LTCG should be calculated using the FMV of each trade in the Tradewise Tax P&L Report.
- Transfer In/Out
If you moved your portfolio from another broker to Zerodha or wise-a-versa, your brokers will have partial data (either buy-side or sell-side depending on transfer in or out). Most brokers including Zerodha let traders enter such missing data. However, there are high chances of missing out Capital Gains arising out of such transfers.
Devolvement means that the option contract will get converted into a futures contract of the same underlying. As per the Zerodha Support thread, the RMS team (at their discretion) can square-off of open positions upon Failure to produce the margin. Any gains/losses arising from such trades will be included in the Tax PnL report - marked as "DEVOLVED"
As per the Zerodha thread, Reversal trades are alleged to be non-genuine trades. All reversals will be included in Tax PnL report - marked as "REVERSALS". However, reversals are punched in on a cost basis & hence do not carry any tax consequences.
All of the above conditions are considered when you file your Tax Return using Quicko. However, reporting may vary depending on your specific situation, hence it's always advisable to consult a tax professional when in doubt.