What is a Tax Computation Statement?
A Tax Computation Statement is a crucial document that outlines the tax implications of transactions carried out within the capital markets through a financial intermediary such as Geojit during a specific financial year. This statement helps clients understand the tax impact of their trading activities, summarizing both profits and losses, and ensuring compliance with tax regulations. It serves as an essential tool for tax planning and filing, providing detailed insights into how various transactions affect your tax liabilities.
The Tax Computation Statement is designed to offer a comprehensive view of your trading activities, including short-term and long-term transactions, and ensures that all necessary tax-related information is accurately compiled. By reviewing this statement, clients can better understand their capital gains or losses, which is critical for accurately reporting to tax authorities and managing tax obligations effectively.
How to Access Your Tax Computation Statement
To view and download your Tax Computation Statement, you need to use the MyGeojit platform, which provides a user-friendly interface for accessing financial statements and other essential documents. The process is straightforward, and the statement can be obtained by following these steps:
Step 1: Log in to MyGeojit
Begin by logging into your MyGeojit account. Ensure you have your credentials handy to access the platform securely.
Step 2: Navigate to Statements
Once logged in, select the "Statements" option from the main menu. This section typically includes various types of financial statements and reports related to your account.
Step 3: Choose Capital Gains Statements
In the "Statements" section, look for "Capital Gains Statements" and select it. This will direct you to the specific area where you can request your Tax Computation Statement.
Step 4: Select the Desired Fiscal Year
Choose the fiscal year for which you need the Tax Computation Statement. This step ensures that you receive the statement corresponding to the correct financial year for accurate tax reporting.
Step 5: Read and Accept the Terms and Conditions
Before submitting your request, read the terms and conditions associated with the Tax Computation Statement. Accept these terms to proceed with generating your statement.
Step 6: Submit and Receive Your Statement
Submit your request, and the statement will be forwarded to your registered email address within an hour on working days. Be sure to check your email for the document and any additional instructions or information.
What Does the Tax Computation Statement Include?
The exported folder containing your Tax Computation Statement will typically include three essential files:
P&L Calculation File:
This file provides a detailed breakdown of profits and/or losses from sale transactions, including both short-term and long-term trades. It includes transactions for the selected financial year, regardless of when the securities were purchased. This document helps in understanding the financial outcomes of your trading activities.
STT-10DB Form:
This form reports the Securities Transaction Tax (STT) deducted during the financial year. It is important to note that STT charged is not considered an expense in the capital gain statement. Instead, other relevant expenses such as brokerages, GST, exchange levy, and stamp duty are included in the statement. The STT-10DB Form helps ensure that STT is accurately reported for tax purposes.
Buy Not Found File:
This file lists transactions for which there is no corresponding buy trade record. Such transactions are excluded from the tax calculation. If you find transactions listed here, you will need to manually update these details on MyGeojit. After updating, you should regenerate the statement to ensure that these transactions are included in your tax computation.
Important Points to Note
When accessing and using your Tax Computation Statement, keep the following points in mind:
Password Protection:
The statements are password-protected to ensure the security and confidentiality of your financial information. For individual clients, the password comprises the first four characters of your PAN (in capital letters) followed by the first four characters of your date of birth in DDMM format. Non-individual clients will use their PAN (in capital letters) as the password.
New Format for FY 2022-2023:
Starting from the financial year 2022-2023, the format of the statements will change. Previous years’ statements will retain the old format. The new format includes a generated Excel file with multiple sheets, each providing specific details:
Summary Sheet: Offers an overview of your trading results.
Equity, Equity Derivatives, Currency Derivatives, Commodity Sheets: Detail transactions in respective categories.
Ledger Balance Sheet: Shows the balance of your accounts.
Other Charges Sheet: Includes charges such as brokerages and taxes.
Opening Position and Closing Position Sheets: Provide details on positions at the beginning and end of the financial year.
Acquisition Cost of Bonus Shares:
In the new format, the acquisition or purchase cost of bonus shares is considered as zero. This affects how the cost of such shares is reported and calculated for tax purposes.
Futures and Options Sheets:
The futures and options (F&O) sheets include turnover information and separate P&L calculations for futures and options. This is important for understanding the financial impact of these transactions and for complying with tax audit requirements.
By following these guidelines and understanding the contents of your Tax Computation Statement, you can ensure accurate tax reporting and effective management of your financial obligations. This document is an essential part of your tax preparation process, providing clarity on your trading activities and their tax implications.