Accounting treatment of Share purchases and GST

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Manoj Kumar Bora (Querist)
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28 September 2020 Dear Sir, When we purchase and sales of shares of listed company from brokers. Brokers issue a contract notes/bill for purchase/sales of shares. In this contract note included name of company, rate of shares & net purchase/sales amount and brokerage & expenses of stock exchanges/transaction charges such as STT, Turnover charges, sebi charges & GST Exps. My query is what is accounting treatment as per income tax & how to pass the entry in accounts. The cost included in purchase of stocks, brokerage & expenses of stock exchanges/transaction charges such as STT, Turnover charges, sebi charges & GST Exps or only stocks purchase Exps. Please explain in above issue. Thanks & Regards

Manoj

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 September 2020 The cost included in purchase of stocks, brokerage & expenses of stock exchanges/transaction charges such as STT, Turnover charges, sebi charges & GST Exps.
While calculation of capital gains on sale all these expenses are considered as cost.

CA PARTH SHAH

CA PARTH SHAH (Expert)
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12 October 2020 It all depends on how are you treating the transaction.

If you will show capital gains in ITR, you should value you stocks inclusive of brokerage & GST.

If you will show trading of shares as your business, then pass entries of brokerages and other cost seperately in tally.

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