Listed investments
Shares, funds and derivatives held in India: what a year of buying, selling and receiving leaves to establish, and where we come in.
How people usually arrive.
You sold across several funds this year and the statements do not add up to one number.
You trade futures and options alongside a salary and are unsure how that should be treated.
You have losses from an earlier year and want to know whether they can still be used.
Someone has told you your trading may bring an audit requirement, and you want to know whether that is true for you.
Where we come in.
What you can engage us to help with here, how it usually begins, and what is useful to have.
- Working out the year
- We take the broker and fund statements and sort each sale by the way it is treated, check the holding period that applies to each tranche, and establish the cost to set against it, including corporate actions and reinvested distributions. What you get is one reconciled working for the year, rather than a set of statements that disagree.
- Losses
- We establish what can be set against what, what has to be carried forward, and what would be lost if the return were not filed in time.
- Derivatives
- Where you trade futures and options, we settle how that activity is treated, whether an audit requirement arises for it, what records it needs and how advance tax should be paid through the year. If an audit is required, we can connect you with a practising professional who carries it out, and we prepare what they need.
- Dividends, interest and withholding
- We reconcile what was received against what was withheld and what the department already holds, so the return claims the credit it should.
- The return
- We prepare and file the return from the statements, with any losses recorded so that they survive into later years.
It begins with the statements for the year, including the capital gains statement if your broker or fund house issues one, and last year’s return if losses are being carried.
Useful to have, if you have it
- Broker and fund statements for the year, including the capital gains statement if there is one
- Contract notes or a trade summary for derivatives
- Dividend and interest statements
- Last year’s return, if losses were carried forward
Where this needs another specialist
We advise on the treatment of what you hold. We do not recommend what to buy or sell. Where a tax audit is required we do not carry it out ourselves: if you need one, we can connect you with a practising professional who does, and we prepare what they need.
What becomes relevant, and when.
Each consideration at the stage it tends to arrive, explained once. The ones shared with other matters say so.
Before you act
- What you hold
- Holding period
How long each tranche has been held is one of the first things that changes how its sale is treated. Broker statements carry the dates, though the starting date is not necessarily the one shown.
Shared with four other matters. See them on the map →
At sale
Relevant here too. Explained under Before you act.
- Cost records
The cost of each holding, including corporate actions and reinvested distributions, is what a gain is measured against. It is worth reconciling before a sale, not after.
Shared with four other matters. See them on the map →
- Capital gains
Each sale of shares or units raises a capital gains question. What was bought when, and what it cost, decides how the gain is worked out, and the rules have changed for sales after a certain date.
Shared with seven other matters. See them on the map →
Through the year
- Dividends & interest
Dividends and interest arrive through the year, often with tax withheld at source once they pass a threshold. They are reported for the year they are received and reconciled against that withholding.
- Withholding (TDS)
Tax withheld on dividends and interest shows up in your tax credit statement. Matching it against what was actually received is a routine part of the return.
Shared with five other matters. See them on the map →
- F&O as a business
Income from futures and options is looked at as business income rather than a capital gain, which changes the records expected, the advance tax pattern, whether an audit requirement arises and how the return is prepared.
- Advance tax
Gains and income realised during the year may need advance tax paid in instalments. Large sales part-way through the year are where this usually comes up.
Shared with 01 Starting a business · 02 Tax returns · 09 Property
When there are losses
- Losses & carry-forward
Losses on some holdings can be set against gains on others, within limits that depend on the kind of loss, and what cannot be used this year may be carried forward for a number of years. Both depend on the loss being recorded in a return filed in time.
- The records behind them
At filing
- Income-tax return
Broker statements, dividend records, withholding and any carried-forward losses all meet in the return. Reconciling them is most of the work.
Shared with nine other matters. See them on the map →