Stock Market Accounting in TallyPrime (2025 Guide): How to Record Share Trading, Investments, FIFO Valuation & Capital Gains Easily

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Introduction

With the rise of retail investors and online trading platforms (Zerodha, Upstox, ICICI Direct, Groww), businesses and individuals now need a systematic way to record share transactions—including buying, selling, brokerage, STT, GST, stamp duty, capital gains, and dividend income.

While many traders use Excel, the most reliable method for long-term compliance remains TallyPrime, which supports:

• Investment accounting
• Speculative & non-speculative trading
• FIFO-based valuation
• Capital gains calculations
• Dividend & interest accounting
• GST reporting for brokerage

This article explains how to record stock market entries in TallyPrime, step-by-step, for investors, traders, CA professionals, and audit firms.

1. Types of Stock Market Transactions That Can Be Recorded in Tally

TallyPrime supports all types of market-related entries:

✔ Equity Delivery (Long-Term & Short-Term Capital Gains)

Buy today → Sell after days/months.

✔ Intraday Trading (Speculative Profit/Loss)

Buy and sell on the same day.

✔ F&O (Futures & Options) – Business Income

Derivative margin, MTM adjustments, premium entries.

✔ Mutual Funds

Investment and redemption entries.

✔ IPO, Rights, Bonus Shares

Corporate actions.

✔ Dividend Income

Recorded as indirect income.

✔ Brokerage, STT, GST, Exchange Charges, Stamp Duty

Automatically included as expenses.

2. Ledger Creation Required in TallyPrime

A. Create Ledgers for Stock Brokers

Example: Zerodha, Angel One, ICICI Direct

Gateway of Tally → Create → Ledger

• Name: Zerodha
• Group: Sundry Creditors
• Maintain balances bill-wise: Yes

B. Create Investment Ledger

• Name: Share Investment – Equity
• Group: Investments

For traders (F&O / intraday), create under:

• Direct Expenses / Trading Account

C. Create Bank Ledger

Your bank account used for trading.

D. Create Expense Ledgers

Group them under Indirect Expenses:

• Brokerage Charges
• Securities Transaction Tax (STT)
• Exchange Charges
• Stamp Duty
• IGST/CGST/SGST on brokerage (as applicable)

E. Create Income Ledgers

• Dividend Income
• Profit on Sale of Investments
• Speculative Gain (for intraday)
• F&O Profit/Loss

3. How to Record Stock Market Transactions in TallyPrime

A. Purchase Entry for Shares (Equity Delivery)

Use Journal Voucher (F7) or Contra/Purchase Voucher.

Example: Buy 100 shares of TCS @ ₹3500

Share Investment – Equity Dr   3,50,000

Brokerage Charges Dr               50

STT Charges Dr                     10

Stamp Duty Dr                       5

Bank A/c Cr                    3,50,065

Attach Contract Note as proof.

B. Sale Entry for Shares

Bank A/c Dr                       3,80,000

Brokerage Charges Dr                   50

STT Charges Dr                        15

Profit on Sale of Shares Cr        29,935

Share Investment – Equity Cr       3,50,000

How Profit is Calculated Automatically in TallyPrime

Tally uses FIFO (First In, First Out) method for valuation unless changed in Inventory Features.

C. Intraday Trading Entries (Speculative)

Intraday profit/loss goes into Speculative Gain/Loss.

Bank A/c Dr

Brokerage / STT / Charges Dr

Speculative Loss Dr / Speculative Gain Cr

To Broker Ledger

D. Futures & Options (F&O)

1. Record Premium or MTM

F&O Loss A/c Dr            (if loss)

F&O Profit A/c Cr          (if gain)

Broker A/c Cr / Dr

2. Record Margin Funding

Margin Deposit A/c Dr

Bank A/c Cr

4. Dividend Income Entry

Dividend is directly credited to the bank.

Bank A/c Dr

   To Dividend Income A/c

Dividend is tax-free, but must be shown under Other Income.

5. Corporate Actions in TallyPrime

✔ Bonus Shares

Share Investment A/c Dr

    To Capital Reserve (Bonus) A/c

✔ Split of Shares

Adjust quantity and rate manually in investment ledger.

✔ Rights Issue

Share Investment A/c Dr

    To Bank A/c

✔ Mutual Fund Purchase/Redemption

Similar to equity entries.

6. Reconciling Stock Market Accounts in TallyPrime

TallyPrime helps you reconcile:

✔ Contract notes

✔ Ledger statements
✔ Bank statements
✔ Broker quarterly statements
✔ Realized P&L for audit
✔ Capital gains summary

Using TallyPrime’s Reports:

Gateway of Tally → Display More Reports → Balance Sheet / P&L → Investments Summary
Gateway of Tally → Stock Summary (if inventory mode used)
Gateway of Tally → Daybook for audit trail

7. Advantages of Using TallyPrime for Stock Market Accounting

⭐ 1. Automated Profit Calculation (FIFO-based)

Avoids manual errors.

⭐ 2. Supports Capital Gains & Income Tax Reporting

Helpful for ITR-2 and ITR-3 filers.

⭐ 3. Perfect for CAs & Audit Offices

Clean reports for assessments.

⭐ 4. Works for Equity, F&O, MF, IPO

One place for all investment types.

⭐ 5. High Accuracy in Brokerage & Tax Accounting

Breakup of each charge recorded separately.

⭐ 6. Easily Export Data to Excel or CSV

Useful for income tax and audit.

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