After transferring shares from one of my own demat accounts to another, the source broker has recorded the transfer as a “sell” in the P&L statement. How should this be corrected while filing the ITR?
I think you need to pay stamp duty if its a different beneficall owner. The capital gains are on the transferror not the transferee. However, if its your own account, as long as your CA records it correctly its fine. Its like transferring money from one bank account to another. Its income only if transferred to someone else and in their hands.
Its own account transfer so there is no tax. My question is how to handle the incorrect profit and loss statement as the source broker marks the share transfer as sell.
I dont think it matters what the broker marks as the offmarket transfer does not generate a contract note. So based on your filing things will happen.
Hello @Jack_R
You should exclude this entry from capital gains, as an off-market transfer between your own demat accounts is not treated as a transfer under Section 2(47) of the Income-tax Act and therefore does not attract capital gains tax. Simply keep a record of the shares transferred to your other demat account, and there is no requirement to report these entries in the ITR.
3 Likes
@Quicko What about AIS sell securities? Will it be part of AIS as the broker is treating it as a sell transaction?
Hello @Jack_R
No, AIS does not show transfers of shares between your own demat accounts. Only transactions involving an actual transfer of ownership are reported in the AIS. This is because share market transactions are reported by the depositories, not by the broker, and off-market transfers within your own demat accounts do not qualify as reportable transactions.
1 Like
This is currently a bug in the system of secondary demat transfer. It should show the same price for buy and sell, or at most show as zero profit/loss. see this thread