How do I calculate Capital Gains on shares?

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Vai asked 6 years ago

I need to calculate Capital Gain on Shares for filling ITR.I have 2 queries; 1. Is the below formula to compute Capital gain on Shares is correct? Capital Gain = [Sale Price - Cost of expenditure (i.e brokerage + Transaction Charges + Stamp duty)] - [Purchase Price + Cost of Acquisition (i.e brokerage + Transaction/Turnover Charges + Stamp duty)]. 2. Is GST paid while purchasing shares added to the Cost of Acquisition and Cost of expenditure OR it is completely excluded from calculations like STT? Thank You.

3 Answers

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Sreekanth Staff answered 6 years ago

Hi, 1 - Yes. 2 - There is no GST implication when you buy or sell shares as GST is already included in your brokerage cost.

Vai replied 6 years ago

Thank you Srikanth for quick response. With respect to GST implication, I checked the contract notes of broker, he charge GST separately and it is not included in brokerage. So the question remain, whether I consider it Capital gain calculation or exclude it altogether like STT?

Sreekanth Staff replied 6 years ago

If it’s excluded from the cost (brokerage) then I believe that you can claim it as cost of acquisition. You may kindly re-check with a CA as well!

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m g sastry answered 6 years ago

i have purchased 1000 shares of iob @92 in 2013 and holding the same as on today and again i have purchased 1000 shares of iob @9/- in 2020.if i sell 1000 shares of iob @11 whether i have to pay stcg or i can claim in income tax return as long term capital loss

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Sreekanth Staff answered 6 years ago

Dear MG Sastry, It is treated as LTCG/LTCL (if any). If you sell shares of a company that you've bought on multiple occasions, you always sell your oldest shares first. This is referred to as FIFO ( first in, first out).