STCG on equity shares/ETF-SUNDIP
This query is : Resolved
19 May 2025
WHAT EXPENSES ARE ALLOWED FOR EXEMPTION IN STCG AND LTCG ON EQUITY SHARES LIKE STT, BROKERAGE, INTERNET CHARGES, TRANSACTION & SEBI TURNOVER CHARGES, STAMP DUTY, SERVICE TAX ON BROKERAGE, ETC.?
12 August 2025
Expenses Allowed to Deduct for Capital Gains on Equity Shares (subject to STT):
Brokerage / Commission Paid
Allowed to be deducted from sale consideration.
Stamp Duty
Paid on transfer of shares (sale side), allowed as deduction.
Securities Transaction Tax (STT)
STT is considered part of the cost of acquisition or transfer and is allowed as deduction.
Transaction Charges by Exchange / Clearing Charges
Charges directly related to purchase/sale of securities can be deducted.
Expenses NOT Allowed as Deduction:
Internet Charges / Telephone Charges (General expenses, not directly linked to transaction) — Not allowed.
Service Tax / GST on Brokerage — Generally, GST is input credit and not deductible as expense against capital gains.
SEBI Turnover Charges — Usually not considered a direct expense against the transaction; generally not allowed.
Demat Charges (Annual/Account maintenance) — Not deductible as they are general charges, not transaction-specific.
Important points:
Only direct transaction-related expenses are allowed.
STT is mandatory for equity shares to qualify for concessional tax treatment (LTCG exemption limit and STCG @15%).
Expenses like internet and general admin are considered personal and not deductible.
Brokerage / Commission Paid
Allowed to be deducted from sale consideration.
Stamp Duty
Paid on transfer of shares (sale side), allowed as deduction.
Securities Transaction Tax (STT)
STT is considered part of the cost of acquisition or transfer and is allowed as deduction.
Transaction Charges by Exchange / Clearing Charges
Charges directly related to purchase/sale of securities can be deducted.
Expenses NOT Allowed as Deduction:
Internet Charges / Telephone Charges (General expenses, not directly linked to transaction) — Not allowed.
Service Tax / GST on Brokerage — Generally, GST is input credit and not deductible as expense against capital gains.
SEBI Turnover Charges — Usually not considered a direct expense against the transaction; generally not allowed.
Demat Charges (Annual/Account maintenance) — Not deductible as they are general charges, not transaction-specific.
Important points:
Only direct transaction-related expenses are allowed.
STT is mandatory for equity shares to qualify for concessional tax treatment (LTCG exemption limit and STCG @15%).
Expenses like internet and general admin are considered personal and not deductible.
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