Share Transaction Cost.

Secondary Mkt 1466 views 2 replies

Guest

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.

Replies (2)

Ravindra Manek

Chartered Accountant

74 Points Posted on 17 January 2011

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.

Ramalingam K

Founder & Director - Holistic Investment

21077 Points Posted on 12 May 2014

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