Contract note is the legal document of any transaction carried out on a stock exchange through a stock broker. It serves as the confirmation of trade done on a particular day on behalf of a client on a stock exchange (BSE/NSE). Contract notes can be obtained from your broker at end of the day, which shows the details of shares bought or sold. It is a digitally signed electronic form.
The primary usage of a contract note is listed below:
· Calculation of Capital Gains
· Calculation of total brokerage charged
· Calculation of data for filing Income Tax Return
· Proof in case of dispute with broker
· Cross-examining genuineness of the transactions.
Therefore, if you are dealing in shares and have capital gains, then you are required to provide the contract notes for the purpose of ascertaining your tax liability.