What are securities

Securities are a certificate or other financial instruments that are issued by companies & governments to raise funds. These securities can be issued, purchased, or traded among investors in the securities market.

Any gains from the securities market are taxed as per Income Tax. Usually, equity delivery trading is considered to be an Income from Capital Gains, while all other forms of trading are considered to be Business Income as per Income Tax. Note that turnover needs to be calculated in case of business income

Different methods to calculate Tax P&L.

Tax P&L can be calculated either by scripwise or tradewise method. While scripwise calculations are easier, tradewise method is the most compliant way to determine turnover and Tax P&L.

• Tradewise: The P&L is calculated by summing up the absolute value of profit and loss of every trade made during a financial year.
• Scripwise: The P&L calculation collates all trades on a scrip/contract and then calculates the turnover.

Note that in both methods the P&L will remain the same, but the turnover amount will be different.

Sandbox provides Tax P&L from securities calculators to calculate capital gains and the tax liability of the investor.

Available Tax P&L from Securities APIs

• Calculate Tax P&L from Tradebook: takes tradebook to calculate tax P&L.
• Calculate Tax P&L from Tradewise: takes tradewise trading activity to calculate tax P&L.
• Calculate Tax P&L from Scripwise(Coming Soon): takes scripwise trading activity to calculate tax P&L.