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Accounting entries for share trading

Bhavesh (Accounts) (899 Points)

20 April 2014

I want to know, in case of individual who has a Share Trading Business should post the Share Purchase and Sale in Tally. What is an accounting treatment for Brokerage, STT, Service Tax, Stamp Duty, etc. and also i want to know if the same is trading in F&O then what treatment has to be given. From the point of Income Tax what has to be consider for the above. Your view and suggestions about the above topic will be highly appreciated. Pls. suggest , you can also reply to me on bhavesh1119 @ gmail.com. Thanks all in advance.

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CA SANKET GARG (Sanket Garg & Company ) (838 Points)
Replied 21 April 2014

Keeping Record in Tally is very good and appropriate because by this proper gain/loss shall be determined by you at the end of transaction. STT, Brokerage, Service Tax and Transaction Charges will become the part of purchase/sale value.

In F&O the accounting of Margin Money Deposit and gain/loss on particular contract will be done. This can be done easily by obtaining the summary of transaction statement from broker.

One can treat shares income in income tax by taking various assumptions. like if any one is doing regular trading then he can show that a business gain/loss.