I want to know correct accounting treatment of Transaction Cost of Share purchase and sell.
Whether to allocate common expenses like STT, Transaction charges, Stamp duty and Sebi fees to all the shares purchased / sold or to book them as expenses and adjust with capital gain/ loss at year end.
Please Suggest.
It depends on the nature of gain/loss. If the share purchase / sell activity is treated as trading activity, all these would be treated as expenditure and charged to P & L A/c. (STT is now allowable as expense under Income Tax).
However if share purchase / sell is done as investment activity, these expenses will form part of cost of shares.
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Regards
Ramalingam K, MBA, CFP,
Director and Chief Financial Planner,
Holistic Investment Planners
“Best Performing Financial Advisor Award” Winners from CNBC TV18
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