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Brokerage Allowed or not

Chinmay (Accounts Professional) (356 Points)

23 December 2010

HI,

In case I am brought 50 shares of listed co. for Rs.100/-*** each, & sell in a day @ Rs.105/-*.

Then in my taxable income Purchasing & Selling brokerage both having deduction or only selling brokerage have the deduction......

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10 Replies

ANKUR KUMAR (CA-FINAL) (39 Points)
Replied 23 December 2010

Dear Chinmay,

When u purchase shares then Brokerage will form the part of yours Cost and when u sale shares the brokerage will be deductable expense from the sale proceeds.

Therefore,brokerage on both the Purchase and sale will be allowed.

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prashant goyal (CA-Final) (100 Points)
Replied 26 December 2010

i do agree with ankur......

Chinmay (Accounts Professional) (356 Points)
Replied 26 December 2010

Thanks for Comment,

But what about STT, & the other NSE BSE Charges......

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 26 December 2010

Originally posted by : Chinmay
	Thanks for Comment, But what about STT, & the other NSE BSE Charges......

after addition all charges , calculate cost of purchase

after deduction of all charges calculation remuneration of sales

STT/Brokerage, NSDL charges everything

CA PARAS BAFNA (Practising CA ) (33428 Points)
Replied 26 December 2010

When the assessee is showing his income under the head of Capital Gains , then he should forget STT and debit it to Capital Account inspite of claiming it as deduction.

STT as an expenditure, is allowable to traders only.

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ANKUR KUMAR (CA-FINAL) (39 Points)
Replied 26 December 2010

5th Proviso to Section 48 clarifies that no deduction is available on account of the STT paid on the Purchase and sale transactions in computing capital gains.

Therefore STT Paid will not be reduced from the Sale Price and will not be added to the Cost of purchase.

In my view If NSE and BSE Charges are paid then it will be allowed as deduction.

Also I agree with Paras Sir.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 28 December 2010

Originally posted by : Chinmay
	HI, In case I am brought 50 shares of listed co. for Rs.100/-*** each, & sell in a day @ Rs.105/-*. Then in my taxable income Purchasing & Selling brokerage both having deduction or only selling brokerage have the deduction......

Honourable members ,

the query is for trading transaction only, where stt is allowed, its not a case of capital gain !!

thanks

Abhishek (CA FINAL) (119 Points)
Replied 29 December 2010

however, what if it would have been a capital gains transaction then whether he will be eligible for :

brokerage expenses ??? and what about the service tax, transaction charges, DEMAT charges ????

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 29 December 2010

in case of capital gains, every expense is allowed except STT, here STT is capital expenditure

manoj katara (Service) (209 Points)
Replied 29 December 2010

Originally posted by : ANKUR KUMAR
	5th Proviso to Section 48 clarifies that no deduction is available on account of the STT paid on the Purchase and sale transactions in computing capital gains. Therefore STT Paid will not be reduced from the Sale Price and will not be added to the Cost of purchase. In my view If NSE and BSE Charges are paid then it will be allowed as deduction. Also I agree with Paras Sir.