STCG- Treatment of expenses directly attributable to trade.

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CA RASHMI RANJAN

Chartered Accountants

65 Points Posted on 22 July 2018

Dear All,

Can you pls guide me how to deal with below list of expenses while calculating STCG for an assessee who was involved in trading in stock markets.

1. Interest expenses for availing additional exposures from stock brocker.
2. Brokerage paid for trading securities
3. STT paid on trading securities
4. Transaction charges levied by stock broker.
5. Service Tax and GST paid on above charges.

Thank you in advance for your support.

Regards
Rashmi Ranjan

Replies (4)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121521 Points Posted on 22 July 2018

" list of expenses while calculating STCG for an assessee who was involved in trading in stock markets."

Trading stocks on delivery basis or non-delivery basis i.e. intraday?

rama krishnan

5751 Points Posted on 22 July 2018

if you did share trading as business by not actual delivery, then you can claim all expenses

if you trade by actual delivery, then expenses attributable to sales only be allowed as expenses

CA RASHMI RANJAN

Chartered Accountants

65 Points Posted on 23 July 2018

Trade involves both intra day as well as delivery (holding for few days/months) for short term.. Can we allow STT and ST/GST while calculating STCG??

Anyhow interest and brokerage/transaction charges are allowed as these are directly attributable to trade..

pls guide..

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121521 Points Posted on 23 July 2018

1. Intraday trading in shares is (speculative) business and any profits from the business cannot be declared as STCG.

2. For shares as investment, STT is not deductible but GST, Brokerage, other miscellaneous charges related to sales of the shares can be deducted from sale proceeds to arrive at CG.