How grandfathering rule is explained to compute capital gains for stocks in MProfit?

Modified on Mon, 01 Apr 2024 at 08:59 PM


In this tutorial, we will explain the grandfathering rule to compute capital gains for stocks in MProfit.


Step 1: Login to your MProfit account and double-click Infosys.


Image

 

Step 2: For the Period, choose All To Date from the drop-down list.


Image


Step 3: For example:

Purchase of Shares (March 16, 2016):

Purchase 100 shares.

Price per share: 1100 rupees.


Sale of Shares (February 14, 2024):

Sell 50 shares.

Price per share: 1500 rupees.


Application of Grandfathering Rule:

Identify the highest price (fair market value) for Infosys on January 31, 2018.


Capital Gains Calculation:

Calculate the capital gains for the shares sold using the grandfathering rule.


Determine Tax Liability:

Apply the applicable tax rate to the capital gains calculated.


To confirm this, please follow the steps mentioned below:


Step 1: Click Reports.


Image


Step 2: Select Capital Gains.


Image


Step 3: Choose Capital Gains - ITR Format.


Image


Step 4: Click Stocks.


Image


Step 5: As the shares were sold in the current financial year.


Click Period and select Current Financial Year.


Image


Step 6: Click Generate Report.


Image


The report indicates that on January 31, 2018, the fair market value (FMV) stood at 1166.60. The analysis involves comparing the FMV with the sale price, opting for the lower of the two. 

This resulting value is then contrasted with the purchase price. In this instance, the FMV is lower than the sale price, prompting comparison with the purchase price. 

Since the FMV surpasses the purchase price, the acquisition cost is deemed to be 1166.60. Subsequently, capital gains are computed based on this figure.

This is how you can seamlessly apply the grandfathering rule to compute capital gains for stocks in MProfit!


Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select atleast one of the reasons

Feedback sent

We appreciate your effort and will try to fix the article