Stock purchase & Expenses entry .

Others 226 views 3 replies

Sanjeet

Assistant

155 Points Posted on 11 February 2022

Dear Sir

we have purchased some share from stock Market and same has been sale and also paid some expenses please suggest below entry in books of account is correct or need to change. equity is not a main business we are suppliers of agriculture products.
entry in books of account

During purchase stock.

Investment in stock Dr.( Investment)
State Bank Cr.

Expenses Paid entry.

Brokage Dr.( Capital account)
Stamp duty Dr.( Capital account)
service tax Dr.( Capital account)
STT Dr.( Capital account)
Broker Cr.( Sundry creditors)

During sale and profit entry

State Bank Dr.
investment in stock Cr.
STCG Cr.( Capital account)

Replies (3)

Eswar Reddy S

CFO- at NHTF

58280 Points Posted on 12 February 2022

You can capitalise the expenses on investment to particular security.

Investment A/c Dr
Stamp duty & Other exp Dr

To Bank

Investment A/c Dr
To Stamp duty & Other Exp

Bank A/c Dr
To Investment A/c
To Profit on sale of Shares ( P & L )

In income tax computation , you need to deduct it from business & consider it in capital gains

sabyasachi mukherjee

Profession Business

28207 Points Posted on 14 February 2022

Investment in stock -nomenclature is not correct.
Here investment account is debited real account.Incidental expenses for accquistion are debited. Bank is always credited.Lets come to tax portion .Invest wait for a period of more than 3 years. Capital Gains arise its taxable .Long term it's not taxable upto 1 lakh.

Eswar Reddy S

CFO- at NHTF

58280 Points Posted on 14 February 2022

First understand the question.

Investment is not primary business.So it will come under investments only .Related adjustment has to be done in IT Computation