I think a workaround could be possible. If you pledge the long term holdings and keep the short term holding in unpledge status - then I assume when you place a sell order the qty in the unpledge status would be sold first.
@ShubhS9 - can you clarify?
Nah. Doesn’t work that way. Still fifo will be considered.
So an FD is created using client funds and pledge with clearing corporation. This way brokers earn float and all the funds overnight sits with clearing house.
Basically there is no risk of funds misuse. After new upstreaming rules. Brokers should do payout same day as they can’t keep idle funds. Is system changes made.
I was not allowed to cancel after 4pm. Is cancellation time 4pm.
The retail window closes at 4:30 pm & the HNI [bids above Rs. 2 lakhs] window closes at 4 pm. If you are applying in the HNI category, regulations anyhow don’t allow deletion or downward modification of bids. You can only increase the bid amount in such cases (up to Rs. 5 lakhs with UPI applications).
Even in this case, when the average price is calculated, it is based on FIFO (First In First Out) method. Had answered a similar query here: Selling Stocks without un-pledging - #15 by ShubhS9
So I have no option to use two broking accounts. As Nithin sir told it’s regulatory grey area. I maybe in trouble as per tax issue in future.
I have reliance got at 1000 and holding till now in other broker. In zerodha using my mother account I buy reliance for short term many times …approx 3 times this financial year. I many times hedge my short term holdings in zerodha.
Is it an loophole and will tax issue arises.
So an FD is created using client funds and pledge with clearing corporation. This way brokers earn float and all the funds overnight sits with clearing house.
Basically there is no risk of funds misuse. After new upstreaming rules. Brokers should do payout same day as they can’t keep idle funds. Is system changes made
Can u tell this…sebi started new upstreaming rule to be followed in July 1st.
SEBI had issued this circular ^ in which it was stipulated that unpaid securities be pledged to the Client Unpaid Securities Pledge Account (CUSPA) for 5 days, and if the client doesn’t bring in the funds, the securities be disposed off to recover debit. Manu seems to be referring to the provisions of this specific circular.
However, I don’t think the intent of this circular is to offer T+5 funding 
Yes…it’s this. I think it’s loophole. I pledge my shares to get margin. I buy shares and within t+4 days I send money to meet the margin.
What I understand is its an regulatory loophole. As only var margin to be collected and then brokers should report client shortages on t+5 days. So brokers give time till t+5.
I’m i correct for this.
You’re right. As I’ve said earlier, I don’t think it’s regulatory intent to offer T+5 funding using this route. We will not be able to provide such a facility at Zerodha for now.
I’m only waiting for MTF. I buy short term in zerodha and long term in other broker to segregation of shares for long term capital gains due to fifo.
Also
I buy reliance share for rs1000 say 10 shares to keep for long term like years and years
Then there is sudden short term opportunity in reliance at price rs1500. After rs1500 rose to rs1750. I sell it, due to fifo. Rs1000 will be sold now. So long term capital gains will be calculated from rs1500 when I sell reliance say 5 years later.
I can buy pase fifo by having two demat account. This is regulatory loophole right and income tax loophole
This is not regulatory loophole. That was the intent.
FIFO system was introduced, because there is no way to say which shares you sold, unlike physical certificates. So, they needed to sort this issue of which shares are sold. They introduced FIFO because of this reason because there is no better way.
In two different demat, this issue doesn’t arise, so that is perfectly fine. If they wanted, they could have made FIFO global instead of per demat, but they didn’t purposefully, for obvious reason.
I sometimes sort this issue of capital gain by transferring longterm shares to different demat account, then sell, then bring back old shares. That way you can sell later bought shares. Completely okay according to IT circular.
kindly link the source/circular
Read this thread —
it contains circular too.
thanks. How come they’ve not updated anything in that thread? Z team seems to have been tagged in it.
Chirag, FIFO is applicable on demat account basis. So, you need to pay capital gains in this case.
For transferred shares, the FIFO logic is slightly tricky.
I really want to keep one demat account.
But now I have to keep two
One for long term,
Other I use apps like liquide, stratzy etc to buy short term. But if I find the shares good i use my other demat account to buy the same for year’s of long term.
I had short term tata motors 3 times. And also has tata motors for long term
They can create a block chain…with one share as block like e ruppe and each demat like walllet.
So entry to of each share with its own share number from one wallet to another will be entered in system.
Also under this system. When one party buys shares and I sold it to him in bse…BSE send the details to cdsl instanous with order I’d, trade no and etc and counter party details. Clearing will do direct settlement without need of pooling accounts.
Sorry that I didn’t put this in peoper way. I can explain more better.
At age of AI and advance software. Need for manual tranfer can be moved away. Like zerodha has to process files etc
I didn’t understand this sir.
For transferred shares, the FIFO logic is slightly tricky.
We’re making the changes to accommodate FIFO logic for off market transfers. Any exit before transfer date won’t be matched with the discrepant buy entry transferred shares. We’'ll update once it is live.
This part. Can I have more explanation.
At present I have two demat accounts to avoid fifo. High volume trades for short term zerodha. Long term fo years another demat. This is only solution to come up