How to deal with Capital gain transactions

POSTED BY ON September 26, 2010 7:59 pm ONE COMMENT

What differentiation we need to make for various kind of profits in share market.

Specifically –

Short term trading on cash (investment less than 1 year)

Intra day on F&O General F&O (for 1,2, or 3 months contracts)

Long term investments (investments more than 1 year)

Also what shall be the cost price to take any share to balance sheet.

Suppose I bought & sold ABC Ltd shares in following way –

24 May 2009 Buy 500 Shares @ Rs 20 = Rs 10,000

24 June 2009 Buy 400 Shares @ Rs 30 = Rs 12,000

30 Aug 2009 Sale 400 Shares @ 34 = Rs 13,600

24 Sept 2009 Sale 100 Shares @ 32 = Rs 3200

So can I take (10,000+12,000-13,600-3200) = Rs 5,200 as investment for remaining 400 shares?

i.e In my balance sheet it will show ABC Ltd 400 Shares @ 13/share.

Or I need to do that on FIFO method –

i.e I will need to show (10,000-13,600-3,200) = (6800) profit as short term capital gain & in my balance sheet ABC Ltd 400 shares @ Rs 34/share.

Also suppose this 400 Shares of ABC Ltd bought on 30 Aug 2009 is kept by me till 10 Jan 2012 (i.e more than 2 years)

& in 10 Jan 2012 I sale 200 Shares of ABC Ltd as intraday @ 49/share & than again same day I buy those 200 shares @ Rs 40/share. Than shall I need to show long term capital gain of Rs (49-34) * 200 = Rs 3,000

& in my balance sheet will I need to show

200 Shares of ABC Ltd (bought on 30 Aug 2009) @ Rs 34/share, &

200 Shares of ABC Ltd (bought on 10 Jan 2012) @ Rs 40/share

Sorry my inquiry became very very broad, but I wanted to explain it fully, so that I can get nice reply 🙂