Assume that I had purchased 100 shares (let it be X), each share @ Rs:1000/- on 1-Jun-2016 and again I bought 100 shares at 950 on 1-Jun-2017. Now I have total of 200 shares.
If I sell 100 shares @ 970 on 3-Sep-2017. How should I consider it as a profit or loss in terms of taxation ?
Your average buy price would be 200 shares at 975. When you sell, on 3rd Sept @ 970, you can treat this as a capital loss as you are selling below your purchase price.
You need to follow FIFO .(First IN First Out) principle while calculating capital Gains. You will have short term loss as first are sold lesser than the cost.