I am an NRI retail investor. I purchased 3,651 shares of a stock in my NRI PINS account, which subsequently underwent a 1-to-1 bonus issue, mathematically halving the stock price. I liquidated the entire holding on the same day to recover my capital. My actual net economic profit across the complete lifecycle was a mere ₹2,884.29.

However, because my original buy and the subsequent bonus sales occurred across decoupled accounts managed by the same broker, their system completely blanketed my initial purchase transaction. They treated the bonus shares, sold in my NON PINS account as "zero cost" in complete isolation, calculated an artificial short-term capital gain of ₹80,322, and locked up ₹19,213.02 in TDS —which is seven times my actual profit!

As independent experts, is it legally permissible for an intermediary to enforce punitive tax withholdings solely because their internal software suffers from a technical gap and cannot track a client's unified ledger? What recourse do I have when the broker's system blindness creates an artificial financial loss on paper?