Investing P&L Realised Unrealised

Realised vs unrealised profit calculation on Kite

From WebNotes, a public knowledge base. Last updated 20 May 2026. Reading time ~4 min.

The distinction between realised and unrealised profit is core to portfolio accounting. On Kite , realised profit is the gain or loss locked in by completed sell trades; unrealised profit is the mark-to-market value of open positions. Tax treatment, transaction reporting, and FY-end financial planning all hinge on this distinction.

Definitions

Term	Meaning
Realised profit	Gain or loss locked in by a completed sell of a previously bought position (or buy-back of a short)
Unrealised profit	Gain or loss on an open position computed at the current LTP
Mark-to-market (MTM)	The unrealised profit / loss; updated continuously during market hours

Realised becomes a tax event in the FY it occurred. Unrealised does not affect tax until the position closes.

Where each appears on Kite

Position state	Where it shows
Open intraday	Positions Day view, as unrealised MTM
Closed today	Positions Day view, as realised P&L
Open delivery	Holdings , as unrealised P&L
Closed today (CNC sell)	Realised on Positions; debited from Holdings
Closed in earlier session	Console , in the trade P&L report

Average cost computation

For a long position bought in multiple lots:

Avg cost = Σ (Buy price_i x Quantity_i) / Σ Quantity_i

This is weighted-average cost accounting, not FIFO at the Holdings level. When you sell, the realised P&L is computed against the average cost, not against any specific lot.

Example:

Buy 100 @ Rs 100; buy 100 @ Rs 110.
Avg cost = (100 x 100 + 100 x 110) / 200 = Rs 105.
Sell 50 @ Rs 120: realised P&L = (120 - 105) x 50 = Rs 750.
Remaining 150 shares at avg cost Rs 105.

FIFO and tax-treatment alignment

Indian capital gains tax is computed using FIFO at the lot level (oldest bought first). When you compute capital gains for tax purposes:

Identify the lot being sold by its acquisition date.
The acquisition cost is the buy price of that specific lot.
Holding period (LTCG vs STCG) depends on the lot’s acquisition date.

Kite’s average-cost display gives a quick portfolio summary, but for tax accuracy, use Console > Tax P&L, which applies FIFO lot-level identification.

Corporate action adjustments to avg cost

Action	Effect on avg cost
Stock split	Avg cost divides by the split ratio (5:1 split -> divide by 5)
Bonus issue	Avg cost = (original cost x original qty) / new total qty
Dividend	No effect (income, not return-of-capital)
Buyback	Reduces holding by buyback qty at buyback price
Rights issue (subscribed)	New lot added at rights subscription price
Demerger	New cost basis allocated per fair value at demerger date

For each corporate action, the depository updates the per-account record; Kite reads it and adjusts the displayed avg cost.

Short positions

For a short (selling without holding):

Avg open price = Σ (Sell price_i x Quantity_i) / Σ Quantity_i

When you buy back: Realised P&L = (Avg open - Buy back price) x Qty.

A profitable short has Buy back price < Avg open.

Multi-day positions

If you carry a position across multiple days (NRML F&O):

Daily MTM is realised at end of day (cash settled).
Unrealised displayed value at any time reflects the position’s open price vs current LTP.

For tax purposes, the F&O gains are classified as business income (subject to tax-audit conditions); realised vs unrealised matters mainly for in-session monitoring.

Adjustments for charges

Kite displayed P&L is typically gross of brokerage and exchange charges. For net P&L (which is what affects tax):

Console > Trade P&L deducts brokerage, STT, exchange transaction charge, GST, stamp duty, SEBI fee.
The net figure is what should reconcile with your bank statement.

The difference between gross and net P&L can be 0.05% to 0.5% of trade value, more for active intraday traders.

External references

References

Income Tax Act, 1961, section 48 (computation of capital gains).
Income Tax Act, 1961, section 112A (LTCG on listed equity).
Zerodha Support, Average cost and realised P&L on Kite, support.zerodha.com.
Zerodha Console, FIFO-based tax P&L report, console.zerodha.com.

Reviewed and published by

WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 20 May 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.