Purchase and sale of shares

Tax queries 120 views 4 replies

Bhavesh

Accounts

172 Points Joined September 2018

Which expenses can I claim during the purchase and sale of the shares for individuals as well as companies? Also want to know what accounting entries are passed.

Replies (4)

Rama chary Rachakonda

Master in Accounts & high court Advocate

8821 Points Joined December 2011

Expenses Claimable by Individuals - *Brokerage Fees*: Fees charged by

brokers for buying or selling shares. - *Transaction Charges*: Charges levied by stock exchanges or depositories for transactions. -

*Dematerialization Charges*: Charges for converting physical shares to demat form. -

*Custodian Fees*: Fees charged by custodians for holding and safeguarding securities. Expenses Claimable by Companies - *Brokerage Fees: Fees charged by brokers for buying or selling shares. -

Transaction Charges*: Charges levied by stock exchanges or depositories for transactions. -

*Dematerialization Charges*: Charges for converting physical shares to demat form. -

*Investment Management Fees*: Fees charged by investment managers for managing investments. Accounting Entries For Individuals -

*Purchase of Shares*: - Debit: Investment in Shares (asset account) - Credit: Bank/Cash (payment account) -

*Sale of Shares*: - Debit: Bank/Cash (receipt account) - Credit: Investment in Shares (asset account) - Gain/Loss on Sale of Shares (income/expense account) For Companies -

*Purchase of Shares*: - Debit: Investments (asset account) - Credit: Bank/Cash (payment account) -

*Sale of Shares*: - Debit: Bank/Cash (receipt account) - Credit: Investments (asset account) - Gain/Loss on Sale of Investments (income/expense account) Tax Implications -

*Capital Gains Tax*: Gains from sale of shares are subject to capital gains tax.

- *Tax Deducted at Source (TDS)*: No TDS is applicable on sale of shares. Accounting Standards -

*AS 13*: Accounting Standard 13 deals with accounting for investments. -

*Ind AS 109*: Indian Accounting Standard 109 deals with financial instruments and investments.

Consult a chartered accountant or tax professional to ensure compliance with tax laws and accounting standards.

Bhavesh

Accounts

172 Points Joined September 2018

Originally posted by : Rama chary Rachakonda
	Expenses Claimable by Individuals - Brokerage Fees: Fees charged by brokers for buying or selling shares. - Transaction Charges: Charges levied by stock exchanges or depositories for transactions. - Dematerialization Charges: Charges for converting physical shares to demat form. - Custodian Fees: Fees charged by custodians for holding and safeguarding securities. Expenses Claimable by Companies - Brokerage Fees: Fees charged by brokers for buying or selling shares. - Transaction Charges: Charges levied by stock exchanges or depositories for transactions. - Dematerialization Charges: Charges for converting physical shares to demat form. - Investment Management Fees: Fees charged by investment managers for managing investments. Accounting Entries For Individuals - Purchase of Shares: - Debit: Investment in Shares (asset account) - Credit: Bank/Cash (payment account) - Sale of Shares: - Debit: Bank/Cash (receipt account) - Credit: Investment in Shares (asset account) - Gain/Loss on Sale of Shares (income/expense account) For Companies - Purchase of Shares: - Debit: Investments (asset account) - Credit: Bank/Cash (payment account) - Sale of Shares: - Debit: Bank/Cash (receipt account) - Credit: Investments (asset account) - Gain/Loss on Sale of Investments (income/expense account) Tax Implications - Capital Gains Tax: Gains from sale of shares are subject to capital gains tax. - Tax Deducted at Source (TDS): No TDS is applicable on sale of shares. Accounting Standards - AS 13: Accounting Standard 13 deals with accounting for investments. - Ind AS 109: Indian Accounting Standard 109 deals with financial instruments and investments. Consult a chartered accountant or tax professional to ensure compliance with tax laws and accounting standards.

Bhavesh

Accounts

172 Points Joined September 2018

Originally posted by : Bhavesh
	Originally posted by : Rama chary Rachakonda Expenses Claimable by Individuals - Brokerage Fees: Fees charged by brokers for buying or selling shares. - Transaction Charges: Charges levied by stock exchanges or depositories for transactions. - Dematerialization Charges: Charges for converting physical shares to demat form. - Custodian Fees: Fees charged by custodians for holding and safeguarding securities. Expenses Claimable by Companies - Brokerage Fees: Fees charged by brokers for buying or selling shares. - Transaction Charges: Charges levied by stock exchanges or depositories for transactions. - Dematerialization Charges: Charges for converting physical shares to demat form. - Investment Management Fees: Fees charged by investment managers for managing investments. Accounting Entries For Individuals - Purchase of Shares: - Debit: Investment in Shares (asset account) - Credit: Bank/Cash (payment account) - Sale of Shares: - Debit: Bank/Cash (receipt account) - Credit: Investment in Shares (asset account) - Gain/Loss on Sale of Shares (income/expense account) For Companies - Purchase of Shares: - Debit: Investments (asset account) - Credit: Bank/Cash (payment account) - Sale of Shares: - Debit: Bank/Cash (receipt account) - Credit: Investments (asset account) - Gain/Loss on Sale of Investments (income/expense account) Tax Implications - Capital Gains Tax: Gains from sale of shares are subject to capital gains tax. - Tax Deducted at Source (TDS): No TDS is applicable on sale of shares. Accounting Standards - AS 13: Accounting Standard 13 deals with accounting for investments. - Ind AS 109: Indian Accounting Standard 109 deals with financial instruments and investments. Consult a chartered accountant or tax professional to ensure compliance with tax laws and accounting standards.