What is Bonus Stripping and how is it managed by MProfit?

In this tutorial, we will explain how to handle Bonus Stripping in MProfit.

For the purpose of this guide, we will be using Allcargo Logistics as an example.

Follow the steps below:

Step 1: We will login to our MProfit account and begin with some buy and sell transactions that have already been added for Allcargo Logistics.

On November 1, 2023, we made an initial buy transaction where we purchased 100 shares at 50 rupees per share.

Within three months of this purchase, we received a bonus.

Then, on February 10, 2024, we sold the initial 100 shares.

According to the First In First Out method, this resulted in a loss of 3000 rupees.

However, when we generated the capital gains considering bonus stripping, it showed as a capital loss of zero rupees.

Step 2: To generate the capital gains report, navigate to Reports.

Step 3: Select Capital Gains.

Step 4: Next, select Capital Gains - ITR Format.

Step 5: Click on Stocks.

Step 6: Select the desired Period.

Then click Generate Report.

In the generated report, the capital gain is zero rupees. As per the bonus stripping rule, the cost of acquisition for the 300 shares will be the loss amount of 3000 rupees.

Step 7: Click (X) to go back to the Allcargo Logistics screen.

Step 8: To record this, pass a Sell entry from the current screen.

Step 9: Select the Date and click Add Row.

Step 10: Enter the name of the script.

Step 11: Enter the Sale Quantity and the Sale Price.

Step 12: Then click Save.

If you generate the capital gains report again, the cost of acquisition for the bonus shares received earlier will be considered as 3000 rupees.

You can verify this by clicking Reports.

Then Capital Gains > Capital Gains - ITR Format > Stocks.

Finally, click Generate Report.

This is how you can seamlessly handle Bonus Stripping in MProfit in bulk!