Profit and loss after charges: calculate net results without double counting

A price gain is not necessarily the amount you keep. Gross profit and loss compares sale proceeds with purchase value. Net P&L subtracts the costs included in your chosen definition. The phrase “after charges” is only meaningful when you say which charges, which period, and whether the sale has actually happened.

This guide uses invented delivery-share transactions and deliberately hypothetical costs. They are calculation inputs, not Zerodha's rates or an estimate for your account. Use actual statements for completed trades and a current calculator for a proposed transaction.

Define gross and net before calculating

For a fully closed position with one purchase and one sale:

• Purchase value = quantity × purchase price.
• Sale value = quantity × sale price.
• Gross P&L = sale value − purchase value.
• Net P&L before income tax = gross P&L − buy-side costs − sell-side costs.

The official Zerodha charges schedule distinguishes brokerage from other transaction and account charges. Zero brokerage does not mean zero total cost. Applicable charges depend on the account and transaction; avoid turning an illustrative flat fee into a universal rule.

Worked example: a ₹1,200 gain becomes ₹1,130

Suppose you buy 80 fictional River Industries shares at ₹300 and later sell all 80 at ₹315. Assume ₹25 in buy-side costs and ₹45 in sell-side costs, with no other costs or cash flows.

Calculation	Amount
Purchase value: 80 × ₹300	₹24,000
Sale value: 80 × ₹315	₹25,200
Gross P&L: ₹25,200 − ₹24,000	₹1,200
Assumed transaction costs: ₹25 + ₹45	₹70
Net P&L before income tax	₹1,130

The gross price return is ₹1,200 ÷ ₹24,000 = 5%. If the return denominator includes the buy-side cost, the net return is ₹1,130 ÷ ₹24,025 × 100, approximately 4.70%. Calling both numbers simply “return” hides a change in definition.

To check the arithmetic another way, cash paid is ₹24,025 and cash received is ₹25,155. Their difference is the same ₹1,130. This cash bridge is particularly useful when a dashboard combines several subtotals.

Break-even is a model, not a fixed quote

Under this example's fixed ₹70 total-cost assumption, break-even sale value is ₹24,070. Divide by 80 shares to obtain ₹300.875 per share, or approximately ₹300.88. At the rounded price the proceeds are ₹24,070.40, so the model leaves ₹0.40 rather than exactly zero.

Real costs can vary with turnover, instrument, exchange, and other factors. If sell-side cost changes with the sale price, solve using that cost function rather than adding a constant. A displayed break-even price is also not a guarantee that an order will execute there; spreads and slippage affect the eventual result.

Reconcile costs once, not twice

Make a small checklist with columns for cost description, amount, source document, and whether it is already included. If your purchase basis already includes a ₹25 expense, do not subtract that expense again. Likewise, a broker's net result may already incorporate some charges shown elsewhere on the screen.

Zerodha explains that other credits and debits can include entries outside contract-note charges. Match those entries to the funds statement instead of assuming the contract note captures every account expense. Allocate account-level costs only under a documented convention; they do not necessarily belong to one share sale.

Open holdings need different labels

If the 80 shares have not been sold, ₹25,200 is a marked value, not sale proceeds. Deducting an estimated exit cost produces an estimated liquidation result, not realised profit. Future sale prices and charges are unknown. Read realised versus unrealised P&L before combining open and closed positions.

Check the example above against your own records, using the actual purchase and sale charges for the quantity being evaluated. For a proposed Zerodha trade, consult its brokerage calculator and compare the chosen segment and exchange with your assumptions. For extension capabilities, see product features and help. HoldingsTracker Pro provides current insights, not historical account reconciliation or an authoritative charges ledger, and is independent of Zerodha. “Before income tax” is deliberate: this article does not calculate a tax liability, establish deductibility, or provide investment or tax advice.