Understanding Axis Direct Tax P&L Report

How to Download the Tax P&L Report from Axis Direct?

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, stamp duty etc.) are included in Buy and Sell Prices in case of equity, mutual funds, intraday and F&O segments.

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.

Under the Equity segment – ‘Shares/ESOP/RSU’ of the Tax P&L Report, the Buy Price is computed after considering FMV as on 31.01.2018 and the LTCG will be calculated as a difference in sales value and buy value. While for Mutual Funds, FMV is not taken into consideration.

Corporate Actions

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

Dividend

Dividend transactions would not be included under the Equity segment in the Tax P&L.

Transfer In/Out

If you moved your portfolio from another broker to Axis Direct 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. 

Calculation of Trading 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.

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.