Investing STT BTST Holdings

Sold holdings bought back same day on Kite

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

A common scenario on Kite : you sell a CNC delivery holding on day T, then buy it back the same day. This is the “STBT -like” pattern, but for delivery holdings. The mechanics and the STT consequences differ from a clean BTST and warrant care.

The two ways this can happen

Scenario A: sell CNC holding, then buy CNC again

You have 100 RELIANCE in Holdings . At 11:00 you sell 100 at Rs 2,900 CNC. At 14:00 you buy 100 RELIANCE at Rs 2,895 CNC.

Result:

Sell: deemed delivery sell; STT @ 0.025% on sell side.
Buy: deemed delivery buy; no STT on buy (delivery buys are STT-free for the buyer; only sells attract STT under the delivery framework).
T+1: you receive 100 shares back into Holdings.
Realised P&L: (Sell 2,900 - Buy 2,895) x 100 = Rs 500.

This is a normal round-trip; the proceeds from the sale are settled via the T+1 cycle , and the bought-back shares re-credit on T+1.

Scenario B: sell CNC holding, then buy MIS intraday

You sell 100 RELIANCE at 11:00 CNC. At 14:00 you buy 100 RELIANCE MIS. At 15:00 you sell 100 RELIANCE MIS.

Result:

CNC sell: STT @ 0.025% on the sell side.
MIS buy + MIS sell: intraday round-trip; STT @ 0.025% on the sell side only (intraday STT on sells).
Net effect on Holdings: -100 shares (you sold the original holding; the MIS round-trip is separate).
The MIS round-trip realised P&L is on Positions; the CNC sell realised is on Console end-of-day.

Scenario C: sell CNC holding, then buy MIS intraday, then convert MIS to CNC

This is messier. The CNC sell goes through; the MIS-to-CNC conversion creates a new T1 holding for the same scrip. You end up:

Net Holdings on T: 0 (the original 100 went out; the new 100 came in as T1).
Realised P&L: based on the CNC sell vs original avg cost.
The new 100 has a different avg cost (the MIS buy price).

STT implications

Trade leg	STT rate	Who pays
Delivery buy (CNC)	0%	n/a (free)
Delivery sell (CNC)	0.025%	Seller
Intraday buy (MIS)	0% (small)	n/a
Intraday sell (MIS)	0.025%	Seller
F&O sell (futures or options)	Different rates	Per SEBI’s table

For a CNC-sell-then-MIS-round-trip, you pay STT twice on the sell side: once for the CNC sell and once for the MIS sell.

Tax treatment

Capital gains on the CNC sell

The CNC sell is a delivery sale, taxed as LTCG (if held over 12 months) or STCG (if held 12 months or less). The acquisition cost is the original buy price; the sale price is the day-T CNC sell price.

Intraday MIS round-trip

The intraday round-trip is taxed as speculative business income under section 43(5) of the Income Tax Act. Not capital gains. The net of intraday gains is taxed at slab rates.

Mixing the two

Holding period for the CNC-bought-then-sold shares does not start fresh on the buy-back. The original holding ended at the CNC sell; the new holding starts at the buy-back.

On the Kite display

The Positions tab Day view will show:

The CNC sell as a realised position (negative qty closed to zero).
The MIS round-trip as a separate realised position.

The Holdings tab will show:

Original Qty - sold Qty + (T1 from buy-back, if CNC).

A casual glance can confuse this with a single intraday round-trip. Always check the product type (CNC vs MIS) on each leg.

Wash sale considerations

Indian tax law does not have a “wash sale” rule of the kind in some Western jurisdictions, but the sequence-of-trades can still affect:

The cost basis of the new buy (avg cost calculation).
Holding period (resets to the new buy date).

For complex tax situations involving multiple round-trips on the same scrip, consult a Chartered Accountant before filing.

When to do this

Tax-loss harvesting at FY-end (rare for individual investors; complex tax math).
Portfolio rebalancing at fixed prices.
Mistake correction (you accidentally sold and want to buy back).

For routine trading, avoid the same-day-round-trip-on-a-holding pattern; it complicates accounting and adds an extra STT leg.

External references

References

Income Tax Act, 1961, sections 43(5), 48, 111A, 112A.
Securities Transaction Tax Act, 2004.
Zerodha Support, STT and tax for same-day buy-sell on holdings, support.zerodha.com.
Zerodha Console, Tax P&L report, console.zerodha.com.

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