Capital gain
This query is : Resolved
16 March 2020
If I have purchased shares of a company over a period , when I sell part of them ,hope I can consider old or new lot for working out gain or loss
Or FIFO etc is applicable
Or FIFO etc is applicable
16 March 2020
You can use FIFO if all shares are purchased through only one demat account..
If you had used different demat accounts then you may consider actual dates
Message likes :
1 times
18 March 2020
For a single demat account I can consider LIFO also?
Further how the entries are made in ITR ?
Can it be an attached file in xl?
Further how the entries are made in ITR ?
Can it be an attached file in xl?
18 July 2024
When you sell shares of a company that you have acquired over a period of time, the Income Tax Act in India allows you to choose the method for determining the cost of the shares that you are selling. The commonly used methods are:
1. **FIFO (First In First Out):** This method assumes that the shares which are sold first are those that were acquired first. It follows the chronological order of acquisition.
2. **LIFO (Last In First Out):** This method assumes that the shares which are sold first are those that were acquired last.
3. **Weighted Average Cost:** Under this method, the cost of shares sold is based on the average cost of all the shares in your account.
4. **Specific Identification:** This method allows you to specifically identify which shares you are selling based on their acquisition cost.
### Choosing the Method:
- **For a Single Demat Account:** You can choose any of the above methods (FIFO, LIFO, Weighted Average, Specific Identification) for computing your capital gains or losses. It's important to stick to the method consistently once chosen, especially for reporting to the tax authorities.
### Entries in ITR (Income Tax Return):
- When filling out your Income Tax Return (ITR), you need to report the details of your capital gains or losses from the sale of shares.
- Specify the number of shares sold, the date of sale, the sale price, and the method you used to determine the cost of acquisition (FIFO, LIFO, etc.).
- You also need to provide details of any exemptions or deductions you are claiming, such as under Section 10(38) for exempt long-term capital gains from listed equity shares.
### Using Excel for ITR:
- The Income Tax Department in India allows taxpayers to file their returns electronically. You can prepare your calculations and details in an Excel file.
- When filing electronically, you typically upload the necessary documents and statements, including your Excel file containing the computation of capital gains, along with your ITR form.
### Steps for Filing:
1. **Prepare Calculation:** Use Excel to calculate your capital gains or losses based on the method chosen (FIFO, LIFO, etc.), and ensure all transactions are accurately recorded.
2. **Fill ITR Form:** Use the official ITR form applicable to your income and submit it electronically. Provide accurate details of your capital gains, income, and deductions.
3. **Upload Documents:** Along with your ITR form, upload supporting documents including your Excel file containing the detailed computation of capital gains.
4. **Review and Submit:** Double-check all entries for accuracy before final submission.
### Conclusion:
Choosing the right method (FIFO, LIFO, etc.) for computing capital gains from the sale of shares is important for accurate tax reporting. You can use Excel to prepare your calculations and details, which can then be uploaded along with your electronically filed ITR form. Always ensure compliance with the Income Tax Act and consider consulting a tax professional for complex scenarios or specific advice.
1. **FIFO (First In First Out):** This method assumes that the shares which are sold first are those that were acquired first. It follows the chronological order of acquisition.
2. **LIFO (Last In First Out):** This method assumes that the shares which are sold first are those that were acquired last.
3. **Weighted Average Cost:** Under this method, the cost of shares sold is based on the average cost of all the shares in your account.
4. **Specific Identification:** This method allows you to specifically identify which shares you are selling based on their acquisition cost.
### Choosing the Method:
- **For a Single Demat Account:** You can choose any of the above methods (FIFO, LIFO, Weighted Average, Specific Identification) for computing your capital gains or losses. It's important to stick to the method consistently once chosen, especially for reporting to the tax authorities.
### Entries in ITR (Income Tax Return):
- When filling out your Income Tax Return (ITR), you need to report the details of your capital gains or losses from the sale of shares.
- Specify the number of shares sold, the date of sale, the sale price, and the method you used to determine the cost of acquisition (FIFO, LIFO, etc.).
- You also need to provide details of any exemptions or deductions you are claiming, such as under Section 10(38) for exempt long-term capital gains from listed equity shares.
### Using Excel for ITR:
- The Income Tax Department in India allows taxpayers to file their returns electronically. You can prepare your calculations and details in an Excel file.
- When filing electronically, you typically upload the necessary documents and statements, including your Excel file containing the computation of capital gains, along with your ITR form.
### Steps for Filing:
1. **Prepare Calculation:** Use Excel to calculate your capital gains or losses based on the method chosen (FIFO, LIFO, etc.), and ensure all transactions are accurately recorded.
2. **Fill ITR Form:** Use the official ITR form applicable to your income and submit it electronically. Provide accurate details of your capital gains, income, and deductions.
3. **Upload Documents:** Along with your ITR form, upload supporting documents including your Excel file containing the detailed computation of capital gains.
4. **Review and Submit:** Double-check all entries for accuracy before final submission.
### Conclusion:
Choosing the right method (FIFO, LIFO, etc.) for computing capital gains from the sale of shares is important for accurate tax reporting. You can use Excel to prepare your calculations and details, which can then be uploaded along with your electronically filed ITR form. Always ensure compliance with the Income Tax Act and consider consulting a tax professional for complex scenarios or specific advice.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Applicable TDS rate for sale of property in Nov 2024
- Donation Receipt u/s 80G
- TDS deduction (debit notes)
- Can a partnership firm become partner in a LLP ?
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- TDS on purchase of value vouchers for employees ?
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
Trending Online Classes
CAclubindia
