Comment on Classifying Your Market Activity

Shah commented on 27 Jul 2017, 09:49 AM

Thanks for reply sir.
In reference to above question,
When I declare trading as business, I do accounting as ; The shares purchase go into Purchase account and shares sold go into sales account. The profit is calculated as Sales-Purchase= Profit.

Now, if I buy say 100 X Reliance, I make entry of it in purchase account.
But if I have not sold these, at the time of filing return, it will show under Purchase account on left side and Closing stock on right side of the P&L statement of my right?
And later if I want to declare it as LTCG if it crosses holding period of 365 days, How will the accounting entry be changed from Purchase account to Investment?

This is a very big question bothering me since 2 years. If you can clarify this, It will be a game changer and bit relief.

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