I have 5000 shares of xyz company at 10 rupees bought 3 years ago
I have 5000 shares of xyz company at 150 rupees bought 1 years ago
CMP is 170
I want to sell 5000 shares which I bought 1 year ago as there will be only 1 lakh profit at I don’t have to pay any LTCG.
But system will automatically sell from older lot and I have to pay tax on 8 lakh profit.
Is it possible to show while filing tax that I am selling from the shares which I bought at 150 rupees? Since I really have bought them at 150 rupees as well.
Later can I edit price of my remaining holdings in the console and change them to rupees 10?, so remaining quantity will show 8 lakh profits and whenever I sell govt won’t lose any tax.
FIFO (First in First Out) method is followed.
If you are selling 5000 shares; Cost of Rs 10 will be considered.
It is not possible to show that you are selling shares which have been bought at 150 unless you have sold all the shares bought at 10.
The IT Act specifies that FIFO must be used for computing capital gains from securities.
Section 48 of the Act prescribes how to compute income from capital gains
Section 45 says: " for the purposes of … section 48 … the cost of acquisition and the period of holding of any securities shall be determined on the basis of the first-in-first-out method."
So no, you cannot avoid FIFO here. There have also been many court rulings which reaffirm FIFO as the only valid way of computing capital gains from securities.
I think so. The FIFO thing is “per-account”, as per court rulings that I have seen on the subject. And two different DMAT accounts qualify as two different accounts, as per these same rulings. (I am neither an expert nor qualified to give legal/tax advice).
