Unlisted Share Reporting
This query is : Resolved
09 June 2022
I am a Non-Resident. I inherited a very small no of shares from my late Resident mother in 2005 and the transfer in my name was completed in 2006. I have been living abroad since before she passed away. The shares are still in Physical form and not dematted. Hence I never sold them and still have them.
Being abroad I was unaware until now that these unlisted shares have to be reported on my India ITR. I have filed timely ITRs each year from 2005 to get back TDS on my NRO account, but have not entered the share details due to my lack of awareness of this requirement. The shares used to be listed on the Calcutta Stock Exchange (CSE) till 2013 when the stock exchange ceased activity.
So I have 4 questions. 1) Are these shares to be treated as unlisted even though technically they were listed on the CSE but the Exchange is now non-functional? 2) If yes, in order to correct my error, do I file an Updated or Revised Return and for how many years back can I do this correction? 3) How many years ago did this reporting rule for unlisted shares come into being? 4) Since I do not know how much my mother purchased each share for, what would I enter as the Acquisition Price in the ITR?
Thank you in advance
Being abroad I was unaware until now that these unlisted shares have to be reported on my India ITR. I have filed timely ITRs each year from 2005 to get back TDS on my NRO account, but have not entered the share details due to my lack of awareness of this requirement. The shares used to be listed on the Calcutta Stock Exchange (CSE) till 2013 when the stock exchange ceased activity.
So I have 4 questions. 1) Are these shares to be treated as unlisted even though technically they were listed on the CSE but the Exchange is now non-functional? 2) If yes, in order to correct my error, do I file an Updated or Revised Return and for how many years back can I do this correction? 3) How many years ago did this reporting rule for unlisted shares come into being? 4) Since I do not know how much my mother purchased each share for, what would I enter as the Acquisition Price in the ITR?
Thank you in advance
10 June 2022
Not a problem in case of small holding.
Report it at face value from current year ITR filing.
No need for updated return or revised return as it's small value.
Report it at face value from current year ITR filing.
No need for updated return or revised return as it's small value.
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10 June 2022
Seetharaman Sir, will I be able to get the benefit of indexation for these stocks even if I sell them this Financial Year 2022-23, although I report them just once for FY 2021-22 (AY 2022-23) since I actually held them for over 2 years?
Thank you.
Thank you.
11 June 2022
Yes, indexation benefit available from mother's acquisition date or market value as on 1/4/2001 which ever is later.
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11 June 2022
Seetharaman Sir, if after sale of shares I need your assistance to file tax or for other matters, what is the best email id and no. to contact you from abroad?
Thank you.
Thank you.
11 June 2022
rseeraman@gmail.com
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12 June 2022
However, http://www.linkedin.com/pulse/non-resident-has-sold-shares-indian-company-capital-sehgal article says LTCG arising from transfer of unlisted securities or shares of a closely held company, is chargeable to tax in India at 10%, without giving indexation benefits and adjustment on account of forex fluctuation. So I am a bit confused about the 1/4/2001 date as my mother purchased the shares more than 50 years ago. Kindly advise.
Thank you.
Thank you.
12 June 2022
Long-term capital gain on unlisted shares and immovable property is taxable at 20 per cent with indexation.
10% applicable for listed shares.
No need for any confuse.
10% applicable for listed shares.
No need for any confuse.
12 June 2022
Sir what is your opinion on section 112(1)(c)(iii) of the Income Tax Act? Will it apply to me? Thank you.
13 June 2022
Yes, it will apply to you with 10% tax without indexation.
13 June 2022
Your clarification that 112(1)(c)(iii) in respect of unlisted securities applies to me helps a lot. However your previous answer of 12 June said, "Long-term capital gain on unlisted shares and immovable property is taxable at 20 per cent with indexation". Does that mean as a non-resident I can choose between the 10% without indexation and the 20% with indexation for the unlisted shares?
13 June 2022
It's amendment only 10% tax applicable without indexation.
14 June 2022
Okay, and since these were inherited shares will section 49 of the Act apply? Consequently will 55(2)(ac) of the Act also apply? Thank you.
14 June 2022
Yes, both sections applicable.
14 June 2022
As you confirmed 55(2)(ac) applies, your previously mentioned date of 1/4/2001 does not apply but rather FMV on 31/1/2018 applies? Thank you.
14 June 2022
It's for listed shares FMV as on 31/01/2018 not available for unlisted shares
14 June 2022
But in Explanation (a)(ii) of 55(2)(ac) it says, "in a case where the capital asset is a unit which is NOT listed on a recognised stock exchange as on the 31st day of January, 2018, the net asset value of such unit as on the said date". So should it not apply? Thank you.
15 June 2022
Yes, it applies if the company provides the value.
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15 June 2022
What to do if company does not provide the value on 31st day of January, 2018? Company has not been replying to my emails. How then to take advantage of 55(2)(ac)? Thank you.
15 June 2022
Issue lawyer notice they will respond.
21 June 2022
Company responded. They say that as the company is an unlisted company , as such there is no trading in the market. Accordingly no data is available for the value on 31st day of January, 2018. What else can be done?
21 June 2022
What value you are going to sell the shares now.
From the financial statements for the year ended 31st March 2018, we can work out the value.
Get the financial statements the company should give.
From the financial statements for the year ended 31st March 2018, we can work out the value.
Get the financial statements the company should give.
07 July 2022
I was offered Rs 925 per share. Company financial reports are at https://www.indiacarbonltd.com/report.html so what should I do now? Does Rule 11UA(1)(c)(b) apply?
08 July 2022
They should offer atleast Rs 2000 per share based on earnings per share of 199.
08 July 2022
See the link it says Rs 1400 per share.
https://unlistedzone.com/shares/india-carbon-limited-share-price-buy-sell-unlisted-shares-of-india-carbon/
https://unlistedzone.com/shares/india-carbon-limited-share-price-buy-sell-unlisted-shares-of-india-carbon/
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