I understand STT cannot be deducted from the capital gains arising out of sales of equity stocks or equity Mutual Funds.
But can we deduct the brokerage charged on Buy and Sell side of the shares transaction?
a) What else can be deducted before arriving at capital gains for equity stocks?
b) What can be deducted before arriving at capital gains for equity mutual funds?
c) What can be deducted before arriving at capital gains for debt mutual funds?
Brokerage & commission may be deducted as well as STT paid can also be deducted
Hello Ruchikaji,
As per the article below, STT charges cannot be deducted while computing capital gains on equity stock and MFs:
https://economictimes.indiatimes.com/wealth/tax/playing-the-stock-market-heres-how-to-compute-capital-gains/articleshow/54790989.cms
See section Expenditure on Sales/transfer. It says STT charges cannot be deducted.
Most stock trading websites while giving Capital Gains PDF statements are not deducting anything from the Capital Gains.
Hence my question whether the websites are right, or are the taxpayers allowed to deduct Brokerage and other charges on buy and sell segments.
Right. Only brokerage can be deducted.
Most trading websites when giving the capital gains statement they are not deducting anything. They simply perform Sell minus Buy and display the Capital Gains statement.
In case of Mutual Funds, what charges can be deducted from the Capital Gains under "Expenditure on Sales/transfer"?
Only brokerage / commission
But MFs do not have buy and sell Brokerages & Commissions.
| Originally posted by : Ruchika Somani | ||
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Only brokerage / commission |  |
What about annual demat charges? Most banks collect Rs 700 to Rs 850 charges for a demat trading account. Can these charges be deducted?
| Originally posted by : J S BHAVSAR | ||
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Originally posted by : Ruchika Somani Only brokerage / commission What about annual demat charges? Most banks collect Rs 700 to Rs 850 charges for a demat trading account. Can these charges be deducted? |
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Nope.
In act it clearly says only Commission & Brokerage and STT paid is allowed to be deducted
| Originally posted by : Ruchika Somani | ||
|
Originally posted by : J S BHAVSAR Originally posted by : Ruchika Somani Only brokerage / commission What about annual demat charges? Most banks collect Rs 700 to Rs 850 charges for a demat trading account. Can these charges be deducted? Nope. In act it clearly says only Commission & Brokerage and STT paid is allowed to be deducted |
|
But one Economic Times Article clearly says STT cannot be deducted.
| Originally posted by : J S BHAVSAR | ||
|
Originally posted by : Ruchika Somani Originally posted by : J S BHAVSAR Originally posted by : Ruchika Somani Only brokerage / commission What about annual demat charges? Most banks collect Rs 700 to Rs 850 charges for a demat trading account. Can these charges be deducted? Nope. In act it clearly says only Commission & Brokerage and STT paid is allowed to be deducted But one Economic Times Article clearly says STT cannot be deducted. |
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Yes
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