LTCG and Speculative gain treatment

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A user sold shares held for over a year, expecting Long-Term Capital Gains (LTCG) tax treatment. However, their broker classified the subsequent repurchase of the same shares as a speculative gain, even though delivery-based orders were placed for both transactions. The user is seeking clarification on how this discrepancy arises, questioning the broker's deviation from FIFO principles and whether they should complain to SEBI.

S Kalyanasundaram

S Kalyanasundaram (Querist)

13 June 2025 I had 10 shares of a listed company for more than a year. Hence the sale was eligible under LTCG.

I placed Delivery based order to sell the same. It was executed.

Later for the same quantity i placed Delivery based Buy order which was also exeucted.

However the trading acccount shows the gain as speculative gain and not under LTCG.

It seems that as the broker has executed the orders on intra-day basis (though both the orders were Delivery based).

Stock broker or Stock exchanges may adopt different method for squiring off transactions. But how can it deviate from the principle of FIFO?

Request tax experts to clarify.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

15 June 2025 Even though you placed the order assuming it to be delivery based, but the actual delivery of the stocks might not have occurred, as such it was the square up of the deal. Unless the shares are not deducted from your demat account it cannot be called as delivery based transaction.

S Kalyanasundaram

S Kalyanasundaram (Querist)

15 June 2025 Then what is the remedy? Should I complain to SEBI against the broker for executing delivery based order as intra day trade?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

15 June 2025 No, check your contract note, it would be only for difference in sell & purchase price, not for full values.

Actually, you should have delayed the purchase for next day.

S Kalyanasundaram

S Kalyanasundaram (Querist)

15 June 2025 In contract note, it is taken as intraday. But my orders are clearly on Delivery based and there is documentary proof for this. This means that trades have been executed contrary to my orders. Moreover Income tax rules do not specify that FIFO is applicable only when the orders are on different dates.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

16 June 2025 You should have got it rectified from your agent based on your order proof.
Income tax takes the feed from the agency/contract note, not otherwise.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 September 2025 Good luck..

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