Console Tax P&L statement

Overview

The Console Tax P&L statement is a structured profit and loss report generated by Zerodha Console for a specified financial year. Unlike the raw Tradebook, which lists individual executions chronologically, the Tax P&L statement applies the First In, First Out (FIFO) cost-allocation method mandated by the Income Tax Act, 1961 to compute realised gains and losses at the scrip level. The output is segmented by holding period (short-term versus long-term for equity) and by income head (capital gains versus business income for F&O and intraday), making it directly usable in the appropriate schedule of the ITR.

Zerodha generates this report at no additional charge for all account holders. It is one of the most widely consulted documents during the annual ITR filing season (July to October for most retail investors, March for those under audit).

Contents of the Tax P&L statement

The report is divided into several sections corresponding to the tax treatment of each segment:

Short-term capital gains (STCG) on equity

Lists equity delivery trades where the holding period was 12 months or less. For each closed position, the statement shows:

• Scrip name and ISIN
• Buy date(s) and average buy price (FIFO-allocated)
• Sell date and sell price
• Quantity
• Gross gain or loss
• Securities Transaction Tax (STT) paid on the sell leg (relevant for the STT deduction that was available until FY2013-14 and for grandfathering computations)

Short-term gains on listed equity and equity mutual funds are taxed at a flat rate (15% before the Finance Act, 2024 amendment; 20% thereafter for transactions after 23 July 2024).

Long-term capital gains (LTCG) on equity

Lists equity delivery trades with a holding period exceeding 12 months. Key fields are the same as STCG, with the addition of:

• Fair Market Value (FMV) as of 31 January 2018 where applicable (grandfathering under Section 112A)
• Whether the grandfathered cost or actual cost is used as the acquisition cost

LTCG on listed equity exceeding Rs 1.25 lakh (revised from Rs 1 lakh by Finance Act, 2024) in a financial year is taxed at 12.5% (revised from 10%) without indexation benefit.

F&O profit and loss

Futures and options transactions are treated as non-speculative business income. The Tax P&L statement shows:

• Instrument, expiry, and contract details
• Realised P&L per contract (premium received minus premium paid for options; difference in entry and exit price times lot size for futures)
• Aggregate turnover for the F&O segment (absolute sum of profits and losses on squared-off positions plus premium received on sold options)

This section is essential for traders assessing whether they cross the Section 44AB tax audit threshold (turnover above Rs 10 crore in FY2021-22 onwards for those accepting digital payments, or if net profit is below 6% of turnover for those who declare F&O as business income).

Intraday equity profit and loss

Intraday (speculative business income) trades are segregated from delivery trades. The statement shows aggregate intraday profit and loss. Speculative business losses can only be set off against speculative business income, not against capital gains or salary, making this segregation significant.

Dividend income (informational)

Some versions of the Tax P&L include dividend credits as an informational section; dividends are taxed as “other income” at applicable slab rates since the abolition of the Dividend Distribution Tax (DDT) in FY2020-21.

How to download the Tax P&L statement

1. Log in to Zerodha Console at console.zerodha.com.
2. Go to Reports > Tax P&L in the left navigation.
3. Select the financial year (e.g., “FY 2023-24”).
4. Click Download to receive the PDF version, or select View to inspect the data on-screen with options to export specific sections as CSV.

The PDF version is formatted for sharing with a chartered accountant or submission if requested during an income tax proceeding. The CSV version is preferable for import into tax-filing software such as ClearTax or tax-return preparation utilities.

Regulatory and statutory basis

The Tax P&L statement is not a regulatory filing in itself; it is an ancillary tool that helps clients comply with their statutory obligations under the Income Tax Act. The underlying data derives from:

• SEBI (Stock Brokers) Regulations, 1992 – mandate that brokers maintain client trade records.
• Income Tax Act, 1961, Sections 45, 48, 111A, 112, 112A – define capital asset, capital gains computation methodology, and applicable tax rates.
• CBDT Circular No. 6/2016 and subsequent guidance – clarify FIFO as the prescribed method for computing cost of acquisition for securities.
• Finance Act, 2018 – introduced grandfathering provisions; FMV as of 31 January 2018 is taken as cost where actual acquisition predates that date.
• Finance Act, 2024 – revised LTCG rate to 12.5%, exemption threshold to Rs 1.25 lakh, and STCG rate to 20%, effective 23 July 2024.

FIFO cost allocation methodology

The Tax P&L applies FIFO at the ISIN level across all holdings in the account, regardless of exchange. This means shares of a company purchased on NSE and later sold on BSE are pooled in a single FIFO queue by ISIN. The method:

1. Matches the earliest unmatched buy lot against each sell transaction.
2. Splits buy lots where necessary (partial quantity from one lot plus entire subsequent lots).
3. Computes holding period from the buy date of each matched lot to the sell date.
4. Classifies the resulting gain as STCG or LTCG based on whether the holding period crosses 12 months.

Bonus shares carry a zero acquisition cost and are inserted into the FIFO queue at the bonus record date. Rights shares carry the subscription price as acquisition cost.

Limitations and known caveats

Grandfathering accuracy. FMV as of 31 January 2018 is sourced from exchange closing price data. In rare cases – thin-traded securities, demutualised instruments, or securities that underwent complex restructuring – the FMV may require independent verification.

Unlisted securities and off-market transfers. Shares acquired off-market (ESOP vesting, private placement, gifts, inheritance) may not be fully captured if the acquisition was not routed through the Zerodha demat account. Such entries must be manually provided to a tax professional.

Mutual fund transactions. Mutual fund units held in demat form through Zerodha appear in the Tax P&L. Units held in non-demat form (statement of account mode) through other RTAs do not appear; clients must source those records from the Consolidated Account Statement or the relevant fund house.

Intra-year corporate actions. Stock splits, sub-divisions, and consolidations affect the FIFO queue mid-year. The statement handles standard NSE/BSE corporate actions automatically, but exotic restructurings (demergers, composite schemes) may require manual reconciliation.

Pre-demat holdings. Shares dematerialised from physical form carry the original acquisition date and cost as entered at the time of dematerialisation. Errors in that entry propagate into the Tax P&L without any alert.

Relationship to other Console reports

The Tax P&L statement is the processed output of the raw Tradebook. The two documents should always be consistent; material discrepancies between the two suggest a data or processing issue that should be raised with Zerodha support before filing.

Clients who also use the ITR-ready capital gains statement will find that it uses the same underlying computation as the Tax P&L but formats the output to match the specific schedule fields in the ITR form.

Related Console reports:

• Console Tradebook – raw execution data.
• Console Contract notes – settlement-level trade confirmation.
• Console Funds statement – cash ledger.
• Console Holdings report – current portfolio.
• ITR-ready capital gains statement – ITR-formatted output.

Common errors during tax filing

Mismatch with AIS/26AS. The Annual Information Statement (AIS) and Form 26AS aggregate all demat transactions reported by depositories. Where the ISIN-level capital gains in the Tax P&L differ from AIS figures, the discrepancy is usually due to corporate actions or off-market transfers that one system captures and the other does not. Reconciliation before filing prevents notices under Section 143(1)(a).

Double counting of bonus shares. If the tax professional adds bonus shares manually while they also appear in the Tax P&L (because they were credited to the Zerodha demat account), the acquisition cost and resulting gains will be computed incorrectly.

STT credit for cost basis. STT paid on delivery purchases cannot be claimed as a deduction from capital gains under current law; it is, however, allowed as a deduction from business income for F&O traders. Ensure the correct treatment is applied per income head.

Retention

The Tax P&L statement should be retained for at least six years from the end of the assessment year to which it relates (in line with Section 149 of the Income Tax Act for cases potentially subject to scrutiny assessment), and for longer if significant long-term capital assets are held.

References

1. Income Tax Act, 1961, Sections 45, 48, 111A, 112, 112A – Capital gains provisions.
2. CBDT Circular No. 6/2016 – FIFO method for securities cost computation.
3. Finance Act, 2018 – Grandfathering provisions for equity LTCG.
4. Finance Act, 2024 – Revised LTCG/STCG rates effective 23 July 2024.
5. SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 – Record keeping obligations.
6. Zerodha Support, “Tax P&L report on Console” – support.zerodha.com.
7. Income Tax Act, 1961, Section 44AB – Tax audit threshold for business income.