How is my average rate calculated for equity?
First In First Out (FIFO) is a method used while selling stocks and calculating your average rate. Under this method, securities purchased first are sold first.
For example, Mr Raj bought and sold ITC shares as given below:
Note that the average is calculated for delivery products (Cash, BTST & MTF) together; all delivery products follow a single FIFO calculation.
| Date | Buy/Sell | Qty | Rate | Value |
|---|---|---|---|---|
| Jan 1st | Buy | 1,000 | Rs.100 per share | Rs. 1,00,000 |
| June 1st | Buy | 1,000 | Rs.120 per share | Rs. 1,20,000 |
| Total | 2,000 | Avg: Rs.110 (2,20,000 /2,000) | Rs. 2,20,000 |
- On July 31st, he sells 400 shares at Rs.170 per share:
| Date | Buy/Sell | Qty | Rate | Value |
|---|---|---|---|---|
| July 31st | Sell | 400 | Rs. 170 per share | Rs. 68,000 |
- Based on the FIFO principle, the 400 shares sold will be taken from the 1,000 shares purchased on Jan 1st.
- The new average rate is calculated as:
| Date | Buy/Sell | Qty | Rate | Value |
|---|---|---|---|---|
| Jan 1st | Buy | 600 (1,000 - 400) | Rs. 100 per share | Rs. 60,000 |
| June 1st | Buy | 1,000 | Rs. 120 per share | Rs. 1,20,000 |
| Total | 1,600 | Avg: Rs. 112.5 (1,80,000/1,600) | Rs. 1,80,000 |
Corporate actions (such as bonus, split, or consolidation) may impact the average rate, as existing positions get adjusted with purchase or sale quantities. While most corporate actions are updated, such changes are done on a best-effort basis; hence, investors are advised to exercise due caution while placing trades. This is applicable for both equity and Equity derivatives. Any discrepancies may be reported to customercare@geojit.com. Once you have updated your average rate , you can access your Profit & Loss Statement through MyGeojit:
Please Note : •The P&L Statement provided here is not computed for filing tax returns. • For tax purposes, use the Tax Based VAS Report available on MyGeojit. • This report is generated based solely on transactions executed through Geojit from 01.04.2005 onwards and is intended only as a reference for tax assessment. We have taken reasonable care to ensure the information is accurate and factual; however, we do not warrant that the report is complete or error-free. • Profit/Loss is calculated using the FIFO (First In, First Out) method and includes applicable charges. • Transactions not executed through Geojit, including off-market transactions and transactions prior to 01.04.2005, are not considered unless manually entered by you. Rights issues, mergers, demergers and other corporate actions may also require manual updates.
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