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Purchase and sale of shares

Bhavesh (Accounts) (172 Points)

27 May 2025

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.

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Rama chary Rachakonda (Master in Accounts & high court Advocate) (8516 Points)
Replied 28 May 2025

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)
Replied 28 May 2025

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)
Replied 28 May 2025

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.