Gain/Loss calculation in a stock for a financial year?

POSTED BY MITESH ANAND ON July 16, 2012 12:17 pm COMMENTS (3)

Suppose, I bought shares of company A at diff points of time in a year. Below can be the buying dates,price & no of shares.

14th June 2011 – Rs.85 – 100
14th July 2011 – Rs. 75 – 100
14th Aug 2011 – Rs. 90 – 100
06th Sep 2011 – Rs 93 – 100
07th Oct 2011 – Rs 95 – 100

Below can be taken as an example of Selling dates, price & no of shares:

09th Dec 2011 – Rs 67 – 100
10th Jan 2012 – Rs 57 – 100
12th Feb 2012 – Rs 70 – 100

Can in this case, we can choose the maximum buying prices for the shares sold for gain/loss calculation (for tax purpose), as all the shares were bought before selling.. Or it should be always 1st in 1st out?
Can the average buying & selling cost be considered also while calculating gain/loss?

3 replies on this article “Gain/Loss calculation in a stock for a financial year?”

  1. MITESH ANAND says:

    Thanks Ramprakash and Ashal.. The confusion is gone now 🙂

  2. Dear Mitesh, it’s FIFO. 1st purchased ‘ll be considered as 1st sold. So calculate your tax liability accordingly.



  3. Ramprakash says:

    1st in 1st out applicable. since all these transactions happened in the same financial year, you can avg. it if the no. of units sold and bought were equal.

    in ur case for calc., it is 100*[(85+75+90) – (67+57+90)] = 100*36 = 3600… based on 1st in 1st out..

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