Nikita Agarwal
Quick Summary
Investing in unlisted shares in India can have various tax implications, both at the time of acquisition and when selling or transferring these shares. Unlisted shares refer to shares of companies that are not listed on any recognized stock exchange. Here are some key tax implications to consider
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
Unlisted shares are shares of companies that are not traded on any recognised stock exchange.
Profits from selling unlisted shares are subject to Capital Gains Tax. If held for less than 24 months, it's Short-Term Capital Gains (STCG) taxed at income tax slab rates. If held for 24 months or more, it's Long-Term Capital Gains (LTCG) taxed at 20% with indexation benefits.
Yes, any dividend income received by an investor from an unlisted company is taxable in their hands at their applicable tax rate. The company may also be liable for Dividend Distribution Tax (DDT).
No, the wealth tax on unlisted shares was abolished from the assessment year 2016-17 onwards, so there is currently no wealth tax on these assets.
TDS may be required when selling unlisted shares at a profit. The buyer might need to deduct TDS at applicable rates during the purchase, which should be considered by the seller.
Non-resident investors may need a Tax Residency Certificate (TRC) from their home country's tax authorities to avail benefits under Double Taxation Avoidance Agreements (DTAA) between India and their country.
CAclubindia
