Fifo share investment accounting

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For most investors using a single broker like Zerodha or Angel One, you likely don't need to maintain separate FIFO accounting records. Your broker's year-end reports, which automatically apply FIFO for tax purposes, are generally sufficient. However, if you use multiple brokers or transfer shares, you may need to keep more detailed records or manually input data to ensure accurate capital gains and losses are calculated.

naresh

naresh (Querist)
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30 September 2025 now, famous brokers like zerodha/angel one give reports like holding on year end (demat with cost ) so, do we need to maintain ourselves, seperately and account for each contract note?
question --> do clients need to keep fifo accounting records (even if they have demat and investment in single broker like angel one or zerodha?)

my view --> no , angel one/zerodha gives year end position with individual scripts cost thereof, so position on year end can be known. no need to keep records by client.
i think we only need to keep if there are multiple brokers in the financial year, (because then fifo wont work).

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 September 2025 Indian income tax regulations specifically require FIFO accounting for determining holding periods and gains/losses when buying and selling shares, no matter how many times a particular stock is bought or sold.

Brokers like Zerodha and Angel One automatically use FIFO in their tax P&L and holding breakdown reports, and these are generally accepted as sufficient evidence at tax time if you stick to one broker/demat account.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 September 2025 Clients investing through a single broker like Zerodha or Angel One, and holding shares in a demat account, do not need to maintain separate accounting records for each contract note themselves, provided they rely on the detailed reports (such as statement of holdings with cost and tax P&L) generated by the broker. These broker-generated reports already apply the mandated FIFO (First-In-First-Out) method, matching both income tax rules and SEBI regulations for tracking cost and capital gains or losses.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 September 2025 It is not compulsory for clients to maintain their own separate FIFO-based records if a reliable, consolidated statement showing purchase cost, dates, quantities, and realized/unrealized gain/loss is generated by the broker.

However, keeping contract notes and trade books is still a good practice for reference or in case of discrepancies, audits, or while transferring shares between brokers, since it helps reconcile any issues and provides proof if needed.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 September 2025 Manual recordkeeping or careful attention is mainly required only if investing via multiple demat accounts or brokers, where consolidated FIFO tracking may be complicated by multi-broker situations.

If transferring shares from another broker, the purchase price and holding period might need to be entered manually in the new broker’s portal, as the new broker won't have full historical trade data for those holdings.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 September 2025 Good luck....

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