How the calculator works
- Reading the file. It looks for the header row on each sheet (Symbol, ISIN, Buy date, Sell date, Quantity, Buy value, Sell value and the many names brokers use for them) and shows what it picked, so you can correct a column. Totals, notes and repeated headers are skipped.
- Tax P&L or capital gains report (buy and sell date on the same row): used as given.
- Tradebook (one row per buy or sell): for each scrip, buys and sells on the same day are treated as intraday first; the remaining sells are matched against the oldest buys (first in, first out). F&O positions can be long or short and are closed against the oldest open position.
- Short or long term. Listed shares, equity funds and units of InvITs and REITs are long-term when held for more than 12 months.
- Grandfathering. For shares bought on or before 31 January 2018, the cost is the higher of the actual cost and the lower of the fair market value on 31 January 2018 and the sale value. Type the FMV per share when the report does not give it.
- Intraday equity is speculative business income; F&O (and currency and commodity derivatives on a recognised exchange) is non-speculative business income. Turnover is the sum of the absolute profit or loss of each trade, as the ICAI Guidance Note on tax audit explains.
- Tax. Short-term equity gains at 20%; long-term at 12.5% above ₹1.25 lakh; intraday and F&O at slab rates. Short-term losses are set off against short- and long-term gains, long-term losses only against long-term gains, speculative losses only against speculative income, and an F&O loss against any income except salary.
Which return to file
- Only capital gains (with salary, interest and so on): ITR-2.
- Any intraday or F&O income or loss: ITR-3, with a profit and loss account. Losses can be carried forward only if the return is filed by the due date.
- Whether a tax audit is needed depends on turnover (the ₹10 crore limit applies when nearly all receipts and payments are digital) and on other conditions. Ask a Chartered Accountant.
What it does not handle
- Bonus issues, splits, mergers, demergers and rights, which change cost and dates. Brokers' Tax P&L reports usually adjust for them; a tradebook does not.
- Buybacks, dividends, debt funds, gold, bonds, unlisted shares, foreign shares and crypto. Add these in the income tax calculator.
- Expenses: only a brokerage column in the file is deducted from capital gains. STT is never deductible from capital gains; for intraday and F&O business income, all charges including STT are deductible, so reduce those figures yourself if your report shows gross profit.
The broker layouts the tool recognises come from the column names those reports commonly use. Brokers change their reports from time to time; if a file is not read correctly, pick the columns by hand under "Check the columns". The sample files are made up and only resemble each broker's layout.