How MProfit computes capital Gains accurately considering corporate actions?

Modified on Fri, 29 Mar 2024 at 12:12 PM


In this tutorial, we will explain how you can compute capital gains accurately considering corporate actions in MProfit.


Follow the steps below:


Step 1: Login to your MProfit account and select the asset.


Here, we have taken Reliance Industries as an example. 


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Step 2: In the next window, keep the Period as All To Date from the drop-down list.


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Step 3: 

Purchase of Shares

  • Bought a hundred shares at a price of 100 rupees per share.

  • Total purchase amount: 10,000 rupees.

Demerger

  • On July 20, 2023, Reliance Industries was demerged into Jio Financial Services.

  • Ratio: One share of Reliance Industries to one share of Jio Financial Services.

  • Cost allocation ratio: 95.32% for Reliance Industries and 4.68% for Jio Financial Services.

Selling Shares

  • On March 14, 2024, sold all hundred shares at the price of two hundred rupees per share.

  • Adjusted purchase price per share: 95.32 rupees (due to the demerger).

Cross-Checking

  • Verify the selling price (200 rupees) and the adjusted purchase price (95.32 rupees) for accuracy.

  • Access the Reports section located at the top right side for verification.

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Step 4: Select Capital Gains.


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Step 5: Next, select Capital Gains-ITR Format.


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Step 6: Click Stocks.


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Step 7: Click Generate Report.


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Step 8: Here, we observe that the buying price stands at ninety-five point three two. 


This illustrates how demergers are handled within MProfit for Reliance NGO. 


Likewise, let's consider another instance involving HDFC Bank and HDFC Limited.


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Step 9:  Here, we have taken HDFC Bank as an example. 


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Step 10: 

Initial Purchase (January 5, 2022)

  • Purchased 100 shares at ₹50 per share.

  • Total amount: ₹5000.

Merger (July 13, 2023)

  • HDFC Limited merged into HDFC Bank at a ratio of 25:42.

  • After the merger, left with 84 shares of HDFC Bank.

  • Average purchase price after merger: ₹71.43.

Sale (March 16, 2024)

  • Sold 150 shares at ₹500 per share.

  • Applying FIFO method:

    • First, sold the initial 100 shares purchased at ₹50 per share.

    • Then, sold 50 shares from the remaining 84 shares purchased at ₹71.43 per share.

Verification in Reports

  • Access the reports to verify the transactions and calculations.


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Step 11: Select Capital Gains and then Capital Gains- ITR Format


Next, select Stocks


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Step 12: Click Generate Report


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Now, as you can observe, the first hundred shares were bought at fifty rupees each. As for the remaining fifty shares, they were acquired at an average price of seventy-one point forty-three. Using this information, we've calculated the capital gains.


This is how you can seamlessly compute capital Gains accurately considering corporate actions in MProfit!


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