We do not include transferred in securities while calculating verified pnl as user can input any buy price to inflate profits and we can’t verify them, but this user is asking to include them.
Hmmm… OK.
That does sound much better than the claim earlier in the thread.
@Shailesh_Raval can you please elaborate exactly how the verified P&L is being inflated without actual profits, in the current methodology used to geenrate the report?
@siva,
is this approach to inflate profits, a possibility in the current methodology to calculate Zerodha Verified P&L? 
(or is there something in the current methodology,
that prevents anyone from being able to manipulate the numbers like this?)
[ Source ]
Yes, Sure.
Zerodha has considered zero as cost price of transferred in shares. Zerodha claims that it does not include transferred in securities. My question is How? and Why? When Zerodha is mandated by SEBI and income tax department to consider/approximate cost/buy price of transferred in shares in other reports like regular P&L and Tax P&L why does not it do the same for verified P&L report as well?
Consider the following sequence for reliance industries (or any other stock):
At time,
T1 Transferred-in (or Bonus) 500 Qty
T2: Sell 100 @ 1225
T3: Sell 100 @ 1275
T4: Buy 50 @ 1250
T5: Buy 50 @ 1200
T6: Sell 25 @ 1245
T7: Sell 25 @ 1285
T1-T7 may be across different days/weeks/months/years/financial years etc…
Now the key question: when a user sells more quantity than they have bought within the reporting period, which of these sell transactions are excluded from the Verified P&L?
If transferred-in shares are to be excluded, then logically, any sell transactions originating from those shares must also be excluded. Otherwise, the system effectively treats those sells as short positions—which is not possible in this context.
From the current behavior, it appears that no sell transactions are actually excluded. Instead, the system is simply ignoring the cost basis for the shortfall quantity, which results in inflated profits.
This raises a deeper concern: should Zerodha be presenting such figures in Verified P&L when similar treatment is not permitted in Tax P&L or Regular P&L due to compliance requirements?
Isn’t this effectively exposing users to the very risk it aims to prevent?
What exactly happens when the sold quantity exceeds the bought quantity within the Verified P&L reporting period? That is the crux of the issue—and it needs a clear, consistent answer.
Zerodha’s latest response states that buy transactions with zero cost are of bonus shares. If that’s the case, the issue is actually more serious than it first appears.
Regular P&L and Tax P&L follow FIFO, whereas Verified P&L effectively behaves like LIFO in these scenarios. That inconsistency alone should raise concerns.
I understand the intent behind Verified P&L—excluding unverifiable inputs. However, when you factor in transferred-in or bonus shares, the outcome becomes counterintuitive. The system ends up validating a distorted performance, where profits can appear inflated simply due to how cost basis is handled.
What my ticket highlights is not a fringe edge case—it’s a structurally valid way to present inflated performance metrics under the current methodology.
To be clear, I’m not pursuing this for personal gain. I’ve already adjusted my internal processes to compute accurate profit figures independently. But this does raise a broader concern: relying on any broker’s “verified” P&L at face value—without understanding the underlying assumptions—can be misleading.
Curious to hear others’ views on this.