Buyback of unlisted shares as part of capital reduction and final dividend paid

I was holding Reliance Retail shares which is not listed in stock market. The company decided to buy-back the shares as part of capital reduction scheme. They also paid a final dividend before buyback which is the only amount I received which is less than my cost of acquisition. How to present this in Income tax return. I had shown that I hold such shares last year in my ITR. Dividend can be shown in Income from other sources. What can be done in capital gains head.

Hi @AJ_cubehead98
If the company buys back the shares, company pays amount in lieu of such buy back which is considered as the Sales Consideration. However, in your case as you have mentioned company has not paid any consideration except for the Final Dividend which shall be treated as Income from Other Sources.

For Capital Gains, if such unlisted shares were held by you for a period of more than 24 months then such shares would be considered as ‘Long term Capital Asset’ else they would be classified as Short-term capital asset and accordingly the loss (since sales consideration is NIL in your case) can be adjusted against other income from capital gains, if any based on set-off rules related to Short and Long term capital gains.

@garg.pulkit131 Thank you Sir for the reply.

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Hi @garg.pulkit131

I am a shareholder of Essar Oil. There was a buyback offer from the company which I did not participate in and the shares were subsequently delisted. These shares are still lying in my demat account in the name of Nayara Energy. Should I consider this as an unlisted entity and show in the ITR accordingly?


Please clarify on the above query