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.

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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.

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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

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3. How to Record Stock Market Transactions in TallyPrime

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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.

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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.

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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

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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

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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.

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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.

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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

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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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