How to convert CNC to MIS on Kite

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Converting a CNC (Cash and Carry) position to MIS (Margin Intraday Square-off) on Zerodha Kite changes the product code of a same-day buy from a delivery position to an intraday position. This conversion releases the excess margin blocked for full delivery, and makes the position subject to the MIS auto square-off at 3:20 PM IST if it is not manually closed earlier. The conversion is less common than the reverse MIS to CNC conversion but has legitimate use cases, primarily when a trader buys shares as CNC and later decides to exit intraday rather than hold overnight. This guide covers the procedure and important caveats.

When is CNC to MIS conversion used

Intraday exit from a delivery buy: You bought shares as CNC earlier in the day with the intention of holding them, but changed your mind and now want to exit today. Technically, you can sell a CNC position on the same day it was bought (resulting in a BTST-like same-day delivery trade), but converting to MIS and then closing the MIS position is also a valid approach. The key difference is that under CNC, the sale on the same day is a delivery vs receipt (DVR) transaction, while MIS auto square-off is handled as a pure intraday transaction.

Releasing blocked margin: When you buy CNC, Kite blocks the full stock value from your available balance. If you need that cash for another trade later in the day and plan to exit the CNC position intraday anyway, converting to MIS releases most of the blocked margin (replacing it with a smaller MIS margin), freeing cash for other purposes.

Tax consideration: Intraday MIS trades are taxed as speculative income (not as capital gains), while same-day CNC sells are taxed as short-term capital gains/losses. Consult a tax advisor for your specific situation; product code choice has tax implications.

Step-by-step procedure

Log in to Kite during market hours

Open kite.zerodha.com or the Kite mobile app and sign in with your client ID, password and TOTP. This conversion can only be done during active market hours (9:15 AM to 3:30 PM IST), since MIS is an intraday product.

On Kite web, click Portfolio in the left navigation, then Positions. The Positions screen opens. Click the Day tab to see positions opened in the current session. CNC positions you opened today appear here alongside any MIS positions.

Note: Positions in the Net tab that carry forward from previous sessions (overnight CNC holdings) cannot be converted to MIS through this route.

On the Kite mobile app, tap Portfolio in the bottom navigation, then Positions, and select the Day tab.

Identify the CNC position to convert

In the Day positions list, locate the CNC position you want to convert. The product code column confirms CNC. Note the current quantity and the unrealised P&L to make sure you are converting the right position.

Open the conversion panel

On Kite web: Hover over the CNC position row. Action buttons (Add, Exit, Convert) appear in the row. Click Convert. The conversion panel opens.

On the Kite mobile app: Tap the CNC position row. In the detail screen that opens, find and tap Convert.

Select MIS as the target product

The conversion panel shows the current product code (CNC) and a selector for the target product. Select MIS from the target options. The panel may also show the margin implications, how much margin will be released and how much will be required for the MIS position.

Enter quantity and confirm

In the Convert qty field, enter the number of shares you want to convert. You can convert the full quantity or a partial quantity (for example, if you want to hold some shares overnight and exit others intraday).

Click Convert or Confirm. Kite processes the conversion, adjusts the margin blocks and updates the position’s product code.

Manage the MIS position

The position now shows as MIS in the Positions screen. From this point forward, the standard MIS rules apply:

  • The position will be automatically squared off at approximately 3:20 PM IST if you have not exited manually.
  • You can exit manually at any time during market hours by clicking Exit on the position row.
  • You can convert back to CNC if you change your mind (see How to convert MIS to CNC), subject to having sufficient funds.

Consequences of same-day CNC buy and sell

When you buy shares as CNC and sell them on the same day (whether as CNC or after converting to MIS), the transaction is classified differently by the exchange and by the Income Tax Department:

  • Same-day CNC sell (without MIS conversion): Treated as a delivery trade for exchange settlement purposes but may be classified as intraday (speculative) for income tax purposes in India, depending on whether the demat account actually receives the shares or if the position is considered netted.
  • MIS position (converted or original): Squarred off intraday; treated as speculative income for income tax purposes.

Consult the Zerodha equity segment article and a qualified tax advisor for the tax treatment specific to your situation.

What can go wrong

  • Cannot convert settled holdings. Only same-day CNC buys (in the Day positions tab) can be converted. Holdings from previous sessions are not eligible for MIS conversion through this route.
  • Conversion rejected near market close. After approximately 3:15 PM IST, Kite may decline CNC to MIS conversions to avoid creating MIS positions that would immediately be auto-squared off. Perform conversions well before 3:15 PM.
  • Confusion with existing MIS positions. If you have both MIS and CNC positions in the same scrip, ensure you are converting the correct row. The product code column helps identify each position.

References

  1. Zerodha Support, Product conversion on Kite, MIS, CNC, NRML, support.zerodha.com.
  2. Zerodha Support, What is MIS and CNC?, support.zerodha.com.
  3. NSE India, Intraday and delivery products, trading guidelines, nseindia.com.
  4. Income Tax Department of India, Taxation of speculative transactions, incometax.gov.in.

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