Records you should keep anyway

The records are what let a correct tax label survive a question two years later. This chapter is a filing system for a person who trades occasionally and invests regularly, not a substitute for professional advice.

Four folders, even if they are only four directories

Contract notes, one file per day, named by date. Demat statements, the monthly or quarterly one your depository already produces, kept rather than trusted to stay online. Bank statements for the account that pays the broker. Your own ledger with the columns from the previous chapter: date, instrument, quantity, delivery or intraday or derivative, buy value, sell value, charges, and the tax bucket. If a document exists only inside an app that you can lose access to, export it.

What the annual certificate does not replace

Brokers issue a profit-and-loss statement and a tax report. Use them as a checklist against your ledger, not as the ledger. They can classify a trade in a way that matched the app’s product code and did not match your intent, they can split a corporate action awkwardly, and they can be revised after you thought you were done. If your count of delivery sells does not match the report, the mismatch is the work. Ignoring it because the total ‘looks close’ is how a lot gets the wrong holding period.

A reconciliation you can finish in an evening

1. Download the year’s contract notes and the broker’s annual trade report.
2. Check that every report row has a contract note, and every large contract note has a report row.
3. Separate the rows into the three tax buckets before you look at the profit total.
4. Match demat credits and debits to delivery buys and sells. An intraday trade should not appear as a demat movement.
5. Match cash leaving and entering the bank to the broker ledger, including the days you moved surplus back to the bank.
6. File the reconciliation next to the return, with the date you did it.

How long to keep them

Keep records at least for the period during which the assessment for that year can be reopened, and longer if you have carried a loss forward or hold shares whose cost you will need when you finally sell. A bonus you received seven years ago still needs a parent cost and a date when you sell it. The cheapest time to save the corporate-action email is the week it arrives, not the year the shares are sold.

What to remember

• Contract notes, demat statements, bank statements, and your own bucketed ledger.
• The broker’s tax report is a checklist, not an authority you cannot question.
• Reconcile counts first and profit second.
• An intraday trade does not belong in the demat statement. If it shows up, find out why.
• Save corporate-action records when they happen. The cost basis will ask for them years later.