Tax on unlisted shares - the basics
Under current Indian tax rules, unlisted shares are treated as long-term if held for more than 24 months. Long-term capital gains are taxed at 12.5% without indexation, while short-term gains are taxed at your income tax slab rate. Rules can change in each Budget, so confirm with a chartered accountant before filing.
Selling ESOP shares
Employees selling ESOP shares of an unlisted company also face perquisite tax at exercise, plus capital gains tax on sale. Keep exercise date, price and fair market value records.
Records to keep
Contract note or deal confirmation, bank payment proof, demat holding statement, and the company's valuation documents. These make tax filing and any future audit easier.
Common fraud signs
Be careful of guaranteed returns, pressure to pay quickly, cash requests, payment to personal or third-party accounts, and shares promised without a demat transfer. Genuine deals are documented and paid by banking channels.
Safe investing checklist
Verify the broker, insist on demat delivery, confirm the ISIN, read the annual report, invest only surplus money, and diversify across companies.
Need help?
Talk to the Unlisted Share Bazar team for company research and a documented buy or sell process.