While the addition of CY/FY filters in the Verified P&L report is appreciated, the far more critical issue remains unresolved—the incorrect treatment of cost (buy price) for transferred-in shares.
Currently, Zerodha appears to assign a zero cost to transferred-in holdings. This directly inflates the Verified P&L profit, effectively equating profit to the full sale proceeds, which is fundamentally incorrect from both an accounting and tax perspective.
This is not a theoretical concern—it is clearly visible in the data. You can verify this yourself here:
Please review the entry for Reliance Industries (most likely on the second page). The distortion in profit calculation is evident.
Until the cost basis of transferred-in shares is handled correctly, the Verified P&L report will continue to present misleading figures. This issue should take precedence over feature enhancements, as it directly impacts the accuracy and reliability of financial reporting.
We’re adding more date ranges to Verified P&L, such as Previous FY and Current FY, along with a few other enhancements.
We do not include discrepant entry P&L (for transferred stocks) in Verified P&L because the buy prices are user-provided and cannot be verified. Therefore, Verified P&L includes only entries and exits within Zerodha.
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.