How to Read Your Zerodha Tax P&L Report — A Trader's Guide
Every Zerodha trader receives a Tax P&L report — but most don't know what half the numbers mean or how they connect to their ITR-3 filing. This guide walks you through every section of the report, explains what STCG, LTCG, and the charges breakdown actually mean, and shows you exactly where each number goes on your tax return.
1. What is the Zerodha Tax P&L report?
The Tax P&L (Profit & Loss) report is a document generated by Zerodha that summarises all your trades for a financial year in a format designed specifically for income tax filing. It is different from your regular account statement in one critical way: it uses FIFO (First In, First Out) matching, which is the method required by the Income Tax Department to calculate capital gains.
FIFO means that when you sell shares, Zerodha matches the sale against the oldest purchase first. If you bought 100 shares of Infosys in January 2024 and another 100 in June 2024, and then sold 100 in August 2024, the Tax P&L will use the January purchase as the cost price — regardless of which specific shares you "intended" to sell.
Your regular Kite P&L or Console statement may show different numbers than the Tax P&L. Always use the Tax P&L for tax filing — the regular P&L is for trading performance, not taxation.
2. How to download it from Console
Go to Zerodha Console
Open console.zerodha.com and log in with your Zerodha credentials.
Navigate to Portfolio → Tax P&L
Click on Portfolio in the top navigation, then select Tax P&L from the dropdown.
Select the financial year
Use the year selector to choose the financial year you want (e.g. FY 2025-26 = April 2025 to March 2026).
Download as XLSX
Click the Download button and select XLSX. Save the file — this is what you'll upload to TaxSavingLab or hand to your CA.
The Tax P&L for FY 2025-26 covers trades from 1 April 2025 to 31 March 2026. Selecting the wrong year is one of the most common mistakes. Double-check the dates shown in the report header after downloading.
3. Report structure — the sheets
The downloaded XLSX file contains multiple sheets, one for each trading segment:
📊 Equity Sheet 1
All delivery-based equity trades (NSE and BSE). Covers both STCG (short-term) and LTCG (long-term) transactions. This is typically the largest and most important sheet for retail traders.
📈 F&O Sheet 2
All futures and options trades (equity and index). This income is classified as non-speculative business income — not capital gains.
🥇 Commodities Sheet 3
MCX commodity futures and options. Also classified as non-speculative business income, reported separately from equity F&O.
💱 Currencies Sheet 4
Currency futures and options on NSE/BSE. Non-speculative business income.
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Upload My Zerodha File →4. Reading the Equity sheet
The Equity sheet is divided into two main sections: Short-Term and Long-Term capital gains, each listing individual trades.
Key columns in the Equity sheet
| Column | What it means |
|---|---|
| Symbol | Stock ticker (e.g. RELIANCE, INFY) |
| ISIN | Unique identifier for the security |
| Buy Date | Date of purchase (earliest matching buy under FIFO) |
| Buy Qty | Number of shares sold in this transaction |
| Buy Avg Price | FIFO-matched average cost price per share |
| Buy Value | Total cost of acquisition = Buy Qty × Buy Avg Price |
| Sell Date | Date of sale |
| Sell Avg Price | Average sale price per share |
| Sell Value | Total sale proceeds = Sell Qty × Sell Avg Price |
| P&L | Sell Value − Buy Value (positive = gain, negative = loss) |
Short-Term vs Long-Term — how Zerodha decides
For listed equity shares and equity-oriented mutual funds, Zerodha classifies a trade as:
- Short-Term (STCG) — Held for less than 12 months from buy date to sell date. Taxed at 20% under Section 111A.
- Long-Term (LTCG) — Held for 12 months or more. Taxed at 12.5% under Section 112A, with ₹1.25 lakh annual exemption.
The holding period is calculated from the buy date to the sell date (inclusive of both). A trade where you bought on 15 April 2024 and sold on 14 April 2025 is short-term (364 days). Sold on 15 April 2025 is long-term (365 days).
Intraday section
At the bottom of the Equity sheet, you'll find a separate section for intraday equity trades (MIS orders or trades squared off on the same day). These are classified as speculative business income — not capital gains — and taxed at slab rate. Losses from intraday can only be set off against other speculative income, not against F&O or capital gains.
5. Reading the F&O sheet
The F&O sheet shows all futures and options trades. Unlike the Equity sheet, there is no STCG/LTCG split — all F&O income is treated as non-speculative business income regardless of how long you held the position.
The key columns to look for are:
- Net P&L — The total profit or loss from F&O trading for the year. This is what gets reported as business income in Schedule BP of your ITR-3.
- Turnover — The sum of absolute values of all trade P&Ls. Used to determine whether you need a tax audit (threshold: ₹10 crore for digital transactions in FY 2025-26).
If your Net F&O P&L is negative (a loss), it is recorded as a business loss, not a capital loss. This loss can be set off against STCG and LTCG in the same year, and carried forward for 8 years against future business income and capital gains. You must file ITR-3 to claim this benefit.
6. Understanding the charges section
Each sheet in the Zerodha Tax P&L contains a charges breakdown. These are the transaction costs you paid throughout the year. Here's what each item means:
| Charge | What it is | Deductible for F&O? |
|---|---|---|
| Brokerage | Zerodha's flat fee per order (₹20 per executed order for F&O, ₹0 for equity delivery) | Yes |
| STT / CTT | Securities Transaction Tax (equity/F&O) or Commodity Transaction Tax (MCX) | Yes (F&O only) |
| Exchange Charges | NSE/BSE/MCX transaction charges | Yes |
| SEBI Charges | Regulatory fees charged by SEBI (very small) | Yes |
| GST | 18% GST on brokerage and exchange charges | Yes |
| Stamp Duty | State stamp duty on purchase transactions | Yes |
| DP Charges | Depository participant charge for delivery sell transactions (₹13.5 + GST per scrip per day) | Yes |
STT paid on equity delivery trades (STCG/LTCG) cannot be deducted from capital gains. Only STT on F&O and intraday trades is deductible as a business expense. This is a common point of confusion.
7. How numbers flow into ITR-3
Once you understand the report, here's exactly where each number goes in your ITR-3:
| Zerodha Tax P&L section | Goes into ITR-3 schedule | Tax rate |
|---|---|---|
| Equity STCG (positive) | Schedule CG → Short-Term | 20% (Sec 111A) |
| Equity STCG (negative = loss) | Schedule CG → STCL for set-off | Carry forward 8yr |
| Equity LTCG (positive) | Schedule CG → Long-Term (after ₹1.25L exemption) | 12.5% (Sec 112A) |
| Equity LTCG (negative = loss) | Schedule CG → LTCL (can only offset LTCG) | Carry forward 8yr |
| Equity Intraday P&L | Schedule BP → Speculative Business | Slab rate |
| F&O Net P&L (positive) | Schedule BP → Non-Speculative Business | Slab rate |
| F&O Net P&L (negative) | Schedule BP → Business Loss (set-off & carry forward) | 8yr carry forward |
| F&O charges | Schedule BP → Expenses (deducted from gross business income) | Reduces taxable income |
8. Common mistakes traders make
- Using the regular statement instead of Tax P&L. The numbers will differ because of FIFO matching. Always use the Tax P&L for ITR.
- Forgetting to report F&O losses. Even if you made a loss, you must report it in ITR-3 to carry it forward. Silence means you lose the benefit forever.
- Mixing STCG and LTCG tax rates. Some traders mistakenly apply 20% to LTCG. LTCG is 12.5% with a ₹1.25L exemption — a significantly lower tax.
- Missing DP charges. Many traders overlook DP charges (₹13.5 + GST per sell transaction) as a deductible expense for F&O and intraday income.
- Not filing by the due date. If you have F&O or capital gains losses to carry forward, you MUST file by the due date (usually 31 July). A belated return loses the carry-forward benefit.
- Reporting F&O income in ITR-2. If you have any F&O trades — even a single loss — you cannot file ITR-2. ITR-3 is mandatory.
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