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Accounting for Share Trading with E-margin facility

Dipesh Bhoir (student) (80 Points)

15 September 2019

Can anyone please tell me entries when shares are purchased in e-margin facility given by brokers?

I have demat account with HDFC Securities and they provide me e-margin facility
How do I account for such transaction in Tally?

Explanation with examples will be highly appreciated.

Thanks & Regards,
Dipesh D Bhoir

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2 Replies

Dipesh Bhoir (student) (80 Points)
Replied 12 May 2020

I think you have not understood my question. I know the meaning of E-margin facility. I just wanted to know its Accounting in Tally.

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Yasaswi Gomes new (Finance ) (4514 Points)
Replied 23 February 2024

Certainly! Let’s discuss how to account for shares purchased using the e-margin facility provided by brokers in Tally. I’ll provide step-by-step instructions along with examples:

Understanding E-Margin Facility:
- The e-margin facility allows you to trade in the stock market with borrowed funds from your broker.
- When you purchase shares using e-margin, you’re essentially trading on margin (using borrowed money).
Accounting Entries in Tally:
- We’ll assume that you’re purchasing shares using the e-margin facility from HDFC Securities.
Example Scenario:
- Let’s say you purchase 100 shares of XYZ Ltd. at Rs. 200 per share using e-margin.
Accounting Entries:
- Step 1: Create a Purchase Entry
  - Go to Gateway of Tally > Accounting Vouchers > F9: Purchase.
  - Select the relevant party ledger (HDFC Securities).
  - Enter the details of the shares purchased:
    - Ledger: XYZ Ltd.
    - Quantity: 100
    - Rate: Rs. 200
  - Save the entry.
- Step 2: Record the Margin Amount
  - Create a separate ledger for the margin amount (e.g., “Margin Payable”).
  - Debit the “Margin Payable” ledger and credit the bank ledger (from where you received the margin amount).
- Step 3: Interest Expense (if applicable)
  - If you’re paying interest on the borrowed funds, create a separate ledger for interest expense.
  - Debit the interest expense ledger and credit the bank ledger.
Tally Example Entries:
- Assuming you received a margin of Rs. 20,000 from HDFC Securities:
  - Purchase Entry:
    - XYZ Ltd. Dr. 20,000
      - To HDFC Securities (Party) 20,000
  - Margin Payable Entry:
    - Margin Payable Dr. 20,000
      - To Bank (from where you received the margin) 20,000
Interest Expense (if applicable):
- If you’re paying interest, create an interest expense ledger and record the relevant entries.