Lets Understand the Tax P&L Report from Angel One
You can download the Tax P&L Report from Quicko’s tax planner on the tax P&L tab. The report includes details of segment wise trading – scrip name, buy value, sell value, and trading expenses. Segments included are – Equity Shares, Mutual Funds, Equity Intraday, Futures and Options.
Income Head – Capital gain covers 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).
Business Income Head covers Equity Intraday transactions, Futures and Options. 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:
Expenses
The Tax P&L Report covers transfer expenses that are directly related to trading transactions
The transfer expenses (such as brokerages, GST, transaction charges, STT, stamp duty etc.) are given separately under both Equity Shares. However, in the case of Mutual funds, the transfer expenses are included in Buy and Sell Prices
There are charges named as BKRSCR. Brkscr indicates all the brokerage expenses charged at the end of day, it cannot be segregated at scrip/trade level
In the case of Intraday and F&O, you can also claim other expenses – such as internet expense, legal fee, subscription expenses, depreciation, etc., which are not covered in the Tax P&L Report
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.
The FMV is not taken into consideration while computing LTCG for each trade in the Tradewise Tax P&L Report.
Calculation of Turnover
There are two different methods to calculate turnover for Intraday and Futures & Options:
- Scripwise Method: You calculate the turnover by collating all trades on the particular scrip for the financial year, find the average buy/sell value, and then determine the turnover
- Tradewise Method: You calculate the turnover by summing up the absolute value of profit and loss of every trade done during the year
You can learn more about scripwise and tradewise trading turnover calculation.
1. Intraday
Trading in the stock market on a same-day basis. Thus, it would mean buying and selling on the same day itself.
Turnover
For all intraday transactions, the aggregate or absolute sum of both positive and negative differences from trades is to be considered as a turnover.
Profit/Loss
Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.
Net P&L = Gross P&L – Transfer expenses
Here, Net P&L and Gross P&L shall remain the same as transfer expenses are adjusted in buy and sale values of respective scrips or trading transactions. Since transfer expenses are adjusted, transfer expenses are disclosed as NIL.
2. Futures & Options
In the Tax P&L report, F&O turnover and P&L is computed by considering the following trade segments:
- Equity Futures & Options
- Commodity Futures & Options
- Currency Futures & Options
Turnover
For Futures transactions, Turnover = abs(sell value – buy value)
For Options transactions, Turnover = abs(sell value – buy value) + sell value
*abs() stands for absolute value
Profit/Loss
Gross P&L is generally calculated by summing up overall sales amount reduced by buy amount.
Net P&L = Gross P&L – Transfer expenses
Here, Net P&L and Gross P&L shall remain the same as transfer expenses are adjusted in buy and sale values of respective scrips or trading transactions. Since transfer expenses are adjusted, transfer expenses are disclosed as nil.
Corporate Actions
Transfer In/Out
If you moved your portfolio from another broker to Angel One or vice versa, your brokers will have partial data (either buy-side or sell-side depending on transfer in or out). Most of the brokers let traders enter such missing data. However, there are high chances of missing out Capital Gains arising out of such transfers.
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.
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 not 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. This amendment is applicable to all the buybacks after 5th July 2019. Therefore, buyback gains before 5th July 2019 are taxable for the trader and the ones after 5th July 2019 are exempt.